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JGBS: Slightly Richer On Last Trading Day Of The Year

JGBS
BulletAPACFixed Income BulletsJapanMarkets

JGB futures are stronger after reversing early Tokyo session weakness, +4 compared to settlement levels.

  • Outside of the previously outlined Jibun Bank/S&P Global Manufacturing PMI, there hasn't been much by way of domestic drivers to flag.
  • Cash US tsys are slightly richer in today’s Asia-Pac session after Friday’s heavy session.
  • US data this week includes MNI PMI and Pending Home Sales on Monday, FHFA housing data on Tuesday, weekly claims and construction spending on Thursday, and ISMs on Friday.
  • Bond bears are emboldened as the BOJ will be reducing its monthly debt buying in the first quarter of 2025. Moreover, traders can see that Japanese inflation is proving to be sticky even though the central bank says it wants to see more information before raising interest rates again. The BOJ is also waiting for the next round of wage increases, despite the big hikes which were seen this year. (per BBG)
  • Cash JGBs are 1-2bps richer across benchmarks. The benchmark 10-year yield is 1bp lower at 1.115% versus the cycle high of 1.1340% set earlier today.
  • Swap rates are ~1bp lower apart from the 30-year (+2bps). Swap spreads are mixed.
  • The local market is closed tomorrow for a bank holiday. The next data release will be Jibun Bank PMI Composite & Services on January 6. 
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JGB futures are stronger after reversing early Tokyo session weakness, +4 compared to settlement levels.

  • Outside of the previously outlined Jibun Bank/S&P Global Manufacturing PMI, there hasn't been much by way of domestic drivers to flag.
  • Cash US tsys are slightly richer in today’s Asia-Pac session after Friday’s heavy session.
  • US data this week includes MNI PMI and Pending Home Sales on Monday, FHFA housing data on Tuesday, weekly claims and construction spending on Thursday, and ISMs on Friday.
  • Bond bears are emboldened as the BOJ will be reducing its monthly debt buying in the first quarter of 2025. Moreover, traders can see that Japanese inflation is proving to be sticky even though the central bank says it wants to see more information before raising interest rates again. The BOJ is also waiting for the next round of wage increases, despite the big hikes which were seen this year. (per BBG)
  • Cash JGBs are 1-2bps richer across benchmarks. The benchmark 10-year yield is 1bp lower at 1.115% versus the cycle high of 1.1340% set earlier today.
  • Swap rates are ~1bp lower apart from the 30-year (+2bps). Swap spreads are mixed.
  • The local market is closed tomorrow for a bank holiday. The next data release will be Jibun Bank PMI Composite & Services on January 6.