Richer, Near Session Highs, Tracking US Tsys

In the Tokyo afternoon session, JGB futures have pushed to a session high of 146.59. Currently, JBU3 is dealing at 146.55, +21 compared to the settlement levels.

• There hasn’t been much in the way of domestic drivers to flag, outside of the previously outlined National CPI, which printed in line with expectations.
• Accordingly, local participants appear to have tracked US tsys. US tsys have firmed off session lows in dealings in the Asia-Pac session. There has been no obvious headline driver. Cash tsys yields sit 1-2bp lower across the major benchmarks.
• Cash JGBs are mixed across the curve, with yields 1.2bp lower (20-year) to 1.0bp higher (1-year). The benchmark 10-year yield is 0.6bp lower at 0.640%, above BoJ's YCC old limit of 0.50% but below its new hard limit of 1.0%.
• Swap rates are 0.3bp to 1.6bp lower across the curve. Swap spreads are narrower.
• Next week the local calendar is empty until Jibun Bank PMIs on Wednesday.
• Tuesday sees Liquidity Enhancement auctions for 5-15.5-year JGBs.