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Political Uncertainty Helping The Bid?

JGBS

JGBs have seen a firm bid this morning, with participants buying the latest leg of the recent dip. JGB futures unwound their overnight losses and more, adding 8 ticks to yesterday's Tokyo settlement level come the lunch break, while 10s led the bid in the cash space. Longer dated swap receiving has seemingly helped the space to firm/curve to flatten, with markets perhaps a little cautious ahead of the LDP leadership election given the previously outlined swing in the betting markets in favour of Kishida in light of the previously outlined Kishida-Takaichi pact. A heavy session for the Nikkei 225 is also providing support.

  • The latest round of BoJ Rinban operations revealed the following offer/cover ratios:
  • 3- to 5-Year: 1.99x (prev. 3.11x)
  • 5- to 10-Year: 2.27x (prev. 2.59x)
  • JGBis: 2.90x (prev. 3.02x)
  • The lower cover ratios may provide some support for the space in afternoon dealing.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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