Slightly Richer, Tight Range After Extended Holiday

JGB futures are higher in afternoon trade at 148.60, +15 compared to Tuesday settlement levels, after trading in a relatively tight range for the Tokyo session.

• There hasn’t been much in the way of domestic drivers to flag, outside of the BoJ March Minutes which showed board members believed it was important to continue with easing for prices goals and won’t hesitate to add easing if necessary.
• US tsys are 1bp cheaper to 1bp richer across major benchmarks with the 2/10 curve twist flattening in Asia-Pac trade.
• Technical analysis from MNI suggests that breaking the March 22 high (149.53) would signal the continuation of the uptrend. To the downside, the 50-dma provides support at 147.68, just above the April 18 low.
• Cash JGB curve twist flattens pivoting at the 7-year zone. Yields are 0.9bp higher to 0.7bp lower across the curve with the 1-year zone the weakest and the 40-year the strongest. The benchmark 10-year yield is 0.3bp lower at 0.418%, well below BoJ's YCC limit of 0.50%.
• The swaps curve has twist flattened also with rates 0.1bp higher to 0.6bp lower. The curve pivots at the 3-year zone with swap spreads tighter, except for the 1-year and 40-year zones.
• The local calendar is slated to release March Household Spending and Labour Cash Earnings tomorrow along with 10-year JGB supply.