Slightly Cheaper Ahead Of 2Y Supply

At the Tokyo lunch break, JGB futures bounced off session lows to be -2 compared to the settlement levels.

• Outside of the previously outlined weekly international investment flows, there hasn't been much in the way of domestic drivers to flag. The Consumer Confidence Index is due later.
• Cash US tsys are flat to 1bp richer in today’s Asia-Pac session, with a slight steepening bias. Nvidia’s results and Fed Bostick’s remarks aftermarket have had little impact.
• Cash JGBs are flat to 1bp cheaper across benchmarks. The benchmark 2-year yield is 0.6bp higher at 0.388% ahead of today’s supply. The auction occurs with the 2/5 and 2/10 yield curves near their flattest points in the past 12 months.
• Notably, today's auction follows earlier 5- and 10-year offerings this month that exhibited weak demand metrics.
• Additionally, it's worth mentioning that BoJ Deputy Governor Himino reiterated yesterday the central bank's commitment to further interest rate hikes, provided that economic growth and inflation continue as expected.
• Swap rates are little changed out to the 10-year and 4bps higher beyond. Swap spreads are wider beyond the 10-year.