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Weaken With US Tsy Future Downside, 10yr Linker Sale Today

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JGB futures finished up at 143.91, -.16, post the Tokyo close on Friday. A softer US Tsy futures backdrop, amid Fed caution around the inflation outlook, likely weighed on JGBs.

  • Levels wise, downside focus could rest at last week's lows near 143.70, while the April 26 low came in at 143.61. Earlier May highs were at 144.88.
  • The local data calendar has the March tertiary industry index on tap today. 10yr inflation link bonds will also be sold (¥250bn).
  • In the cash JGB space we ended last week at 0.95% for the 10yr, while the 30yr yield was just under 2.06%. The 10yr swap rate last tracked back above 1.00%.
  • Firmer yield gains for JGBs versus a softer US yield backdrop was noticeable last week. Speculation continues around the BoJ policy outlook and risks the weaker yen prompts further tightening to curb imported inflation risks. Note national CPI prints this Friday in Japan. The next BoJ meeting is on June 14.
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JGB futures finished up at 143.91, -.16, post the Tokyo close on Friday. A softer US Tsy futures backdrop, amid Fed caution around the inflation outlook, likely weighed on JGBs.

  • Levels wise, downside focus could rest at last week's lows near 143.70, while the April 26 low came in at 143.61. Earlier May highs were at 144.88.
  • The local data calendar has the March tertiary industry index on tap today. 10yr inflation link bonds will also be sold (¥250bn).
  • In the cash JGB space we ended last week at 0.95% for the 10yr, while the 30yr yield was just under 2.06%. The 10yr swap rate last tracked back above 1.00%.
  • Firmer yield gains for JGBs versus a softer US yield backdrop was noticeable last week. Speculation continues around the BoJ policy outlook and risks the weaker yen prompts further tightening to curb imported inflation risks. Note national CPI prints this Friday in Japan. The next BoJ meeting is on June 14.