Steeper To Start The Week

JGBs were pressured by the global matters that we have touched on elsewhere, while familiar tones re: policy direction and inputs from BoJ Governor Kishida, alongside continued headwinds for Japanese PM Kishida’s cabinet approval ratings, provided little in the way of meaningful market reaction.

• JGB futures came under some secondary pressure during the Tokyo afternoon, with the contract printing -22 into the close, while the bearish steepening of the curve extended as the day wore on, leaving the major cash JGB benchmarks running little changed to 8bp cheaper ahead of the bell. 10-Year yields were capped by their proximity to the upper end of the BoJ’s permitted trading band.
• The latest round of BoJ Rinban operations (covering 1- to 3-, 5- to 10- & 25+-Year JGBs) failed to provide any meaningful support, with the breakdown of the results somewhat unremarkable in offer/cover terms.
• Looking ahead, preliminary GDP data and 5-Year JGB supply headline domestic matters on Tuesday.