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Super-Long End Leads The Morning Bid

JGBS

The super-long end led this morning’s rally, with the major cash JGB benchmarks richening by ~0.5-3.0bp, bull flattening in the process. JGB futures were +3 at the lunch bell, paring all of their overnight losses. The broader core FI bid and expectations re: the BoJ’s defence of the upper bound of its permitted 10-Year JGB yield trading band (0.25%) seemed to be the major supportive factors for the space this morning.

  • This morning’s BoJ Rinban operations drew the following offer/cover ratios:
  • 1- to 3-Year: 2.91x (prev. 2.27x)
  • 3- to 5-Year: 1.96x (prev. 2.01x)
  • 5- to 10-Year: 1.96x (prev. 2.17x)
  • These offer/covers shouldn’t impact JGB trade after the re-open.
  • In local news, BoJ board member Nakamura stuck to the BoJ’s well-trodden central views in his latest address. Meanwhile, Tokyo and other prefectures requested an extension of the quasi COVID-19 state of emergency that they are currently observing, in line with press reports that have hit in recent days.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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