Oscillating In Narrow Range

The broader bid in core global FI markets (fleshed out elsewhere) allowed JGBs to briefly firm during the Tokyo afternoon, before some weakness crept in ahead of the bell. Futures now print -7 ahead of the close, while cash JGBs are little changed to 1.5bp cheaper across the curve.

• That was after a sedate round of morning dealing saw a modest uptick in JGB yields, while JGB futures traded on the backfoot. This was perhaps a catch-up play to Tuesday’s cheapening in U.S. Tsys.
• Softer than expected domestic industrial production data failed to inspire price action.
• Broader domestic headline flow was limited at best, with no meaningful market reaction to news of a brief joint incursion by Russian & Chinese military aircraft into Japanese airspace.
• Looking ahead, Thursday’s local docket includes capex & final manufacturing PMI data and 10-Year JGB supply. We will also hear from BoJ’s Noguchi.