Subdued Session, Rinban Results Due

At the Tokyo lunch break, JGB futures are stronger and near session highs, +9 compared to the settlement levels.

• Outside of the previously outlined Composite and Services PMIs, there hasn't been much in the way of domestic drivers to flag.
• According to MNI’s technicals team, futures prices faded into the tail-end of last week, putting pressure on nearby support and prompting a poor weekly close. The break lower from here has seen 142.85 - the late May low - give way, with the 142.06 1.0% 10-DMA envelope and 142.00 handle and 141.65 further out - a Fibonacci projection. Key resistance remains at 145.95, the Mar 28 high, off which prices have faded into mid-week.
• Cash US tsys are flat to 1bp richer in today’s Asia-Pac session, with a slight flattening bias.
• Cash JGBs are flat to slightly richer, with the 5-year zone outperforming. The benchmark 10-year yield is 0.3bp higher at 1.089%.
• The results of today’s BoJ Rinban Operations covering 1-5-year and 10-25-year JGBs are due. There was no change in today’s bond buying as the market awaits more details on the BoJ plans. The central bank is meeting with key stakeholders in the bond market space early next week.
• Swap rates are 1-2bps lower across maturities. Swap spreads are mostly tighter.