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Solid 10-Year Supply, Soft Tankan, JGBs Little Changed


JGBS mostly looked through a solid 10-Year JGB auction, with futures last -4 on the day, while the cash space sits unchanged to marginally cheaper, except 10s, which have seen modest richening in the wake of supply.

  • The auction saw the tail narrow when compared to the previous auction and cover ratio move to the highest level seen at a 10-Year auction since May. The low price also topped dealer estimates (~100.72) as proxied by the BBG dealer poll. Looks like the aforementioned relative value and ASW entries that we flagged beforehand may have helped demand.
  • LDP Secretary General Nikai downplayed the prospect of Japanese PM Suga calling a snap election, while he also noted that he would support fresh fiscal stimulus, if required, in an interview with the Nikkei.
  • We also saw BoJ Tankan survey figures mostly miss expectations, but improve on Q2, just, while the CapEx intentions metric was a touch firmer than expected, although not softer than that seen in Q2.
  • Elsewhere, last week saw foreign investors run up the largest week of net sales of Japanese bonds since the turn of the FY.
  • The monthly labour market report and latest round of BoJ Rinban ops headline locally on Friday.
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |

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