Sideways Trade Continues

JGB futures oscillated either side of unchanged levels during Tokyo trade, dealing -3 into the bell, sticking to a tight range, while cash JGBs sit 1bp richer to 1bp cheaper across the curve. There hasn’t been much in the way of a meaningful domestic catalysts, leading to a lack of conviction in JGB trade.

• Offer/cover ratios nudged higher in the latest round of BoJ Rinban operations, perhaps as participants use the move away from recent cheaps in those maturities as a selling opportunity:
• 1- to 3-Year: 3.59x (prev. 2.74x)
• 3- to 5-Year: 2.50x (prev. 1.60x)
• Comments from PM Kishida underscored the BoJ’s independence when it comes to setting monetary policy, while he refrained from commenting on the outlook for the JPY.
• Weekly international security flow data and the latest liquidity enhancement auction for off-the-run 5- to 15.5-Year JGBs will be seen on Thursday.