Super-Long End A Touch Firmer Despite Soft Auction

There was nothing in the way of a notable reaction in JGB futures to the soft round of 30-Year supply, with the contract sticking to a tight range, closing -2. 30s were also little moved in the wake of supply (unwinding a brief, limited nudge higher in yields), while JGBs are marginally mixed across the curve with some light outperformance seen in super-long paper late in the day.

• In terms of 30-Year auction specifics, potential domestic buyers may have been deterred by more attractive 10-Year FX hedged yields on offer across several G10 nations coupled with the current fiscal dynamic in the U.S. This meant that the cover ratio hit the lowest level seen at a 30-Year auction since June of last year, while the tail width doubled vs. the previous 30-Year auction. The low price matched broader dealer expectations, as proxied by the BBG dealer poll, which may have been a saving grace.
• Elsewhere, several prefectures are seemingly pushing for COVID-19 related states of emergency after Thursday's declaration covering Tokyo and some surrounding prefectures.
• A reminder that Tokyo will observe a market holiday on Monday.