Stronger, But Off Session Bests

JGB futures are slightly stronger after the lunch break, sitting at +7, but still off the best levels set in morning trade. There wasn't much in the way of domestic drivers to flag today, outside of the previously outlined JiJi sources piece re: BoJ inflation projections.

• BoJ Governor Ueda went over old ground re: BoJ JGB purchases, playing down desires to finance government spending.
• In the afternoon session, any positive impact from solid demand at the latest liquidity enhancement auction covering off-the-run 5- to 15.5 Year JGBs appeared offset by US Tsys moving away from session bests after China's Q1 GDP beat expectations.
• Cash JGBs are 0.1-1.6bp richer across the curve with the benchmark 10-year yield 0.9bp lower at 0.476%, below BoJ's YCC limit of 0.50%.
• Swap spreads are mixed with the short end marginally tighter and the long end marginally wider.
• Monthly final industrial production readings headline the limited local docket on Wednesday.