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Tight Ranges In The Morning

JGBS

Cash JGBs finished the Tokyo morning little changed to ~1.5bp cheaper, with 7s running 1.0bp cheaper, underperforming surrounding lines, while 30s provide the weakest point on the curve. Meanwhile, futures consolidated most of their overnight losses, but coiled in a tight range, hitting the lunch bell -7.

  • Local headline flow has been relatively light, with the broader defensive start to the week, alongside the continued presence of the BoJ in the market, providing a very modest bid for futures.
  • 10-Year JGB yields hover around 0.245%, 0.5bp away from the upper limit of the BoJ’s permitted 10-Year JGB yield trading band.
  • March’s wage data was a touch firmer than expected, although real wage data printed in negative territory.
  • BoJ Rinban operations provided the following offer/cover ratios
  • 1- to 3-Year: 1.73x (prev. 2.65x)
  • 3- to 5-Year: 1.85x (prev. 1.80x)
  • 10- to 25-Year: 3.22x (prev. 3.00x)
  • These cover ratios shouldn’t result in much spill over in early afternoon dealing.
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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