Wider Matters Remain At The Fore

Weakness in global core FI markets (which came alongside a 50bp hike from the ECB and as some support for both Credit Suisse and First Republic Bank became evident) weighed on JGB futures overnight. That left the contract -53 at the close of post-Tokyo trade, with the pull away from multi-month highs extending, as the contract finished just above the lows of the overnight session.

• Local headline flow has been somewhat light since the Tokyo close, outside of the continued thawing of Japan-South Korea relations (which hasn’t and shouldn’t be a needle mover for JGBs).
• Data from JPX revealed that the week ending 10 March saw the largest round of weekly net purchases of JGB futures on the part of foreign investors since January. This likely reflected short cover around the BoJ’s on hold decision and the SVB-derived market vol.
• The local docket is light today, with only the tertiary industry activity index and 3-month bill supply slated. That will leave participants on headline watch, with adjustments to post-Tokyo close swings in wider markets set to dominate early trading.