JPY Swaps: Early 7y offers; Longs bid; Late-day future selloff

Down candle chart 26 May 2022
The JPY cash bond market closed weaker amid a late-day selloff. 7y swaps turned bid after some early offers. The long-end has been bid.

Start a free trial to read this article

Join today to access all  Total Derivatives content and breaking news. Already a subscriber? Please Log In to continue reading.

Or contact our Sales Team to discuss subscription options.

Get in Touch
Blurred image of Total Derivatives article content

  • JGB closes weaker amid late-day selloff

  • Early 7y offers; Longs bid


Click here for SDR JPY IRS trades


JGB closes weaker amid late-day selloff

JGB future was firmer in the morning and was up by 27-ticks soon after market open, following a strong rally in US treasuries on Thursday.


In overnight trading, some key US treasury yield fell by 10bps intraday following some weak domestic data.


The gains was unable to sustain and a late-day selloff saw the lead bond future closing the day 3-ticks lower at 148.94. The yield on the benchmark 10-year JGB was up 0.5bp to recent high of 0.253%, or above BOJ’s upper limit of 0.25%.


Early 7y offers; Longs bid

Despite earlier gains in the underling cash bond market, the majority of JPY swaps have generally been bid on the day, with stronger paying after lunch break.


10-year, for example, has been slightly better bid with the majority of the trades between 0.6% and 0.615% on the day, up from previous close of 0.595%. 20-year traded in a tight range of 4.25bps higher of around 1.04875%, steepening 10s/20s by about 0.25bp in the morning session.


Earlier rally in bond futures saw light receiving in 7-year at a basis point lower of 0.41% near market open, which was then replaced by paying at up to 0.43% near market close. 2s/7s swaps flattened out by a basis point in the morning before steepening by a basis point to 30.75bps in the afternoon session.