Slightly Cheaper Across Benchmarks, Rinban Results Due

At the Tokyo lunch break, JGB futures are weaker but off the worst levels, -18 compared to the settlement levels.

• Outside of the previously outlined real household spending, there hasn't been much in the way of domestic drivers to flag. Coincident and Leading Indices are due later.
• The BoJ kept bond buying unchanged at today’s Rinban Operations (Y150bn worth of JGBs with <1 Year, Y375bn worth of JGBs with 1-3 Years, Y425bn worth of JGBs with 5-10 Years and Y150bn worth of JGBs with 10-25 Years). Results due soon.
• According to MNI’s technicals team, a bear trend in JGB futures has paused, with prices recovering - a correction - after the latest bout of weakness. The contract recently traded through key support at 143.44, the Nov 1 low, exposing 141.65, a Fibonacci projection. A stronger reversal higher is required to signal the end of the recent downward phase. Key resistance is at 145.95, the Mar 28 high.
• Cash JGBs are cheaper across benchmarks, with yields 0.2bp (1-year) to 1.4bps higher (5-year). The benchmark 10-year yield is 1bp higher at 0.974% versus the cycle high of 1.101% set last week.
• The swaps curve has shifted slightly cheaper, with rates ~1bp higher. Swap spreads are mixed.