- Gains in USTs backs a short-lived JGB rally
- Good 5-10y bid; Curve steepens further
- New issues
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Gains in USTs backs a short-lived JGB rally
The gains in US treasuries in overnight trading supported an early rally in JPY rates when JGB future was up by 13-ticks. The market then erased all the gains after lunch break and was down by 10-ticks before recovering to mark 5-ticks lower at 147.34 in mid-afternoon domestic trading. The yield on the benchmark 10-year JGB was up 2.5bps at 0.435%.
Market participants said the sentiment has been more about selling off JPY rates, extending the momentum from the previous day, and so the US-induced rally in earlier trading was not sustainable. However, with 10-year JGB yield now well above 0.4% dealers would begin to be cautious about selling off further, according to a source.
Good 5-10y bid; Curve steepens further
Trading in swaps has been reasonably busy on the day, backed mainly by paying interest in the 5- to 10-year area of the curve and contrasting the gains in the underlying cash bond market in the morning session.
10-year swaps were paid up 2.75bps at the open before paying eased off a tad in mid-morning domestic trading when it traded only a basis point higher. More aggressive paying emerged after mid-day when 10-year was traded 4-6bps higher of up to 0.8375%.
Slightly down the curve, 5- and 7-year traded up to 5.5-6.5bps higher near market close at 0.4625% and 0.6275% respectively. They were marked around 1.5bps higher at time of writing.
2s/10s and 5s/10s swaps steepened up further by 2.5bps and 1.5bps to 63.25bps and 39.5bps respectively.
- Narita Airport raised JPY54.6bn via a 4-tranche deal as follows:
- JPY8.9bn, 1.5%, February 2, 2040.
- JPY23bn, 0.504%, February 2, 2028 at JGBs + 34bps.
- JPY6.7bn, 0.9%, February 2, 2033.
- JPY16bn, 0.281%, January 31, 2025 at JGBs + 29bps.