Yields Only Marginally Above Recent Lows, Q3 GDP, 5yr Supply In Focus Next Week

JGB futures have seen a modest upside bias emerge in the afternoon session, albeit still well within recent ranges. We were last 144.49, -.27. Earlier lows in the session were at 144.40. This fits broadly with the pattern of US futures, with TYZ up from Thursday lows (last 107-19, +02+), maintaining a modest bid tone.

• In the cash JGB space, yields have continued to tick away from earlier highs. The 10yr is back to the low 0.85% region. We are above Thursday lows, but well below earlier Nov highs ~0.97%. The 20yr is back to 1.55%, while 10yr swap rates are just under 1.04% (earlier Nov highs were ~1.16%).
• This week has seen BoJ Governor Ueda reinforce that the timing of the central bank's exit from easy policy settings still remains quite uncertain.
• 3 month bill supply was digested easily enough earlier. Next week's supply focus will be on 5yr debt. Bloomberg noted the government's extra budget is not expected to change the issuance calendar for the current fiscal year.
• On the data front next week is Q3 GDP (out Wednesday).