Steepening Extends Into 30-Year Supply

The early steepening pressure extended as we worked through the Tokyo morning, with the super-long end dragged lower in the wake BoE Governor Bailey’s late Tuesday comments re: revoking temporary Gilt purchases as scheduled, while some concession ahead of this afternoon’s 30-Year JGB supply was another likely source of pressure for longer dated paper.

• The major cash JGBS run ~1bp richer to ~5bp cheaper across the curve, with 7s presenting the only real point of richening as futures cling onto some of their overnight bid (hitting the lunch bell +9).
• FX markets have dominated when it comes to local focus, with USD/JPY registering a fresh cycle high, triggering familiar rhetoric from policymakers on the intervention front.
• This afternoon’s 30-Year JGB auction headlines today’s domestic docket.