Short-End Bid, Belly Softer

JGB futures were lower from the off, but held a tight range, last -8. Short
end outperformance worked its way into cash trade, while 7s
underperformed for most of the day.

• The latest round of 2-Year supply passed without any real headwinds,
  but was the definition of average. As a reminder, the low price topped
  dealer exp. as proxied by the BBG poll (100.455), while the tail
  narrowed and cover ratio eased vs. the prev. 2-Year offering at the
  margin.
• Local retail sales data beat exp., but was still softer Y/Y, while some
  Tokyo businesses face the prospect of reduced working hours, with
  the city reportedly set to outline its biggest daily jump of COVID-19
  cases on record.• The month end data dump, headlined by the labour
  market report, industrial production and consumer confidence data is
  due tomorrow, as are BoJ Rinban ops covering 5-10 & 25+ Year
  supply.