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JGBS: Subdued Session, Limited Reaction To BOJ Minutes (Oct)

JGBS
BulletAPACFixed Income BulletsJapanMarkets

JGB futures are weaker, -14 compared to settlement levels

  • Outside of the BOJ Minutes for the October MPM, there hasn't been much by way of domestic drivers to flag.
  • The BOJ minutes revealed that one member noted market rates might be lower than appropriate given the BOJ's economic and price projections and its monetary policy guidance. Another member highlighted the difficulty in confidently projecting medium- to long-term rate hikes due to uncertainties about Japan's neutral rate and the transmission mechanism of monetary policy.
  • The local calendar will also see later Dept Store Sales alongside an Auction for Enhanced-Liquidity 15.5-39 YR.
  • Cash US tsys are flat to 1bp richer in today’s Asia-Pac session after yesterday’s heavy session.
  • Cash JGBs are 1bp higher to 2bps lower across benchmarks, with a flattening bias. The benchmark 10-year yield is 0.5bp higher at 1.08% versus the cycle high of 1.113%.
  • The swaps curve has twist-flattened, pivoting at the 10-year, with rates 1bp lower to 4bps higher.
  • Tomorrow, the local calendar will see PPI Services and Coincident/Leading Indices alongside BOJ Rinban Operations covering 3-10-year and 25-year+ JGBs. 
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JGB futures are weaker, -14 compared to settlement levels

  • Outside of the BOJ Minutes for the October MPM, there hasn't been much by way of domestic drivers to flag.
  • The BOJ minutes revealed that one member noted market rates might be lower than appropriate given the BOJ's economic and price projections and its monetary policy guidance. Another member highlighted the difficulty in confidently projecting medium- to long-term rate hikes due to uncertainties about Japan's neutral rate and the transmission mechanism of monetary policy.
  • The local calendar will also see later Dept Store Sales alongside an Auction for Enhanced-Liquidity 15.5-39 YR.
  • Cash US tsys are flat to 1bp richer in today’s Asia-Pac session after yesterday’s heavy session.
  • Cash JGBs are 1bp higher to 2bps lower across benchmarks, with a flattening bias. The benchmark 10-year yield is 0.5bp higher at 1.08% versus the cycle high of 1.113%.
  • The swaps curve has twist-flattened, pivoting at the 10-year, with rates 1bp lower to 4bps higher.
  • Tomorrow, the local calendar will see PPI Services and Coincident/Leading Indices alongside BOJ Rinban Operations covering 3-10-year and 25-year+ JGBs.