Time To Assess North Korea’s Latest Missile Test

The early rounds of Tokyo afternoon trade will see JGB market participants assess news that the latest North Korean missile test resulted in the projectile falling into the sea covered by Japan’s EEZ, with no reports of damage to Japanese assets received thus far.

• This comes after a pocket of demand emerged in the longer end of the JGB curve at one point in the morning, before fading.
• Cash JGBs sit flat to 1.5bp cheaper across the curve, with 7s leading the weakness on the downtick in futures, which sit 10 ticks below yesterday’s settlement levels at the lunch break.
• The latest round of policymaker communique has failed to inspire anything in the way of meaningful price action, offering little new for participants to trade off.