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Steepening Accelerates In The Afternoon As Super-Long End Softens

JGBS

JGB futures nudged lower in early Toyo trade alongside the wider impulse observed in global core fixed income markets, with the contract having a shallow look through its overnight trough, although bears failed to force a meaningful extension. That leaves the contract off of worst levels ahead of the Tokyo close, -10, with wider market gyrations in the driving seat as the space looked through domestic news flow. The latter was headlined by a decline in Prime Minister Kishida’s approval rating, linked to the rise in COVID cases, and press reports flagging the potential for a record increase (~3.2%) to the minimum wage in Japan. Cash JGBs have twist steepened with 2s running 1bp richer, while the rest of the curve softens, led by 40s, which run ~3bp cheaper, with most of the cheapening taking place in the 20+-Year zone.

  • Looking ahead, tomorrow’s local docket will be headlined by 10-Year JGB supply.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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