Stronger Despite Slightly Weaker US Tsys, Aided By BBG BoJ Sources Piece

In post-Tokyo trade, JGB futures (147.50) gained ground, closing at +9 compared to settlement levels, despite US Tsys’ modest weakening in NY trade. After the bell, the US Tsy 2/10 cash curve displayed a mild flattening bias with the 2-year yield +5bp and the 10-year +2bp.

• Overnight strength has brought JGB futures back within the range of 147.40-147.92, which it has generally traded in since early April. Over the past few days, the JGB futures contract has briefly fallen below the lower limit of this range several times but managed to bounce back.
• Late yesterday Bloomberg News reported that BoJ officials were wary of scrapping YCC at next week’s policy meeting after the recent banking crisis overseas clouded the outlook. At the margin, this information would have added some support to the overnight move.
• The local docket sees the release of the March Trade Balance and Weekly International Security Flow data.
• Elsewhere, the latest BBG survey revealed that an overwhelming majority look for no change in policy settings at next week's BoJ meeting (Ueda's first as Governor), while just under 40% of those surveyed look for a tightening step in June (roughly in line with the findings in last month's survey).
• The Ministry of Finance is also scheduled to sell Y1.2tn of 20-Year JGBs.