JPY Swaps: Cautious 5-10y bid ahead of BOJ Chief nomination

BOJ building sign
There has been cautious 5-10y bid ahead of the BOJ chief nomination, which is due next week.

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  • Cautious 5-10y bid ahead of BOJ Chief nomination

  • January PPI below forecast

  • New issues


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Cautious 5-10y bid ahead of BOJ Chief nomination

JGB future has followed the USD rates market weaker. It opened a few ticks lower but dipped by as much as 22-ticks after news about the timetable of the announcement of the BOJ governor nomination. It then trimmed losses to mark 13-ticks lower of 146.56 at mid-day. The yield on the benchmark 10-year JGB was unchanged at 0.493%


Trading in swaps stayed quiet as players were cautious ahead of the announcement of the BOJ Chief nomination, which would be due on February 14. Existing BOJ Governor Haruhiko Kuroda’s tenure is set to expire in April. There have been concerns over choosing hawkish Hirohide Yamaguchi as the next head, and several Liberal Democratic Party members had said it would lead to an opposition within the party.


Players would be on a wait-and-see mode and there would be limited amount of swap flow before that, according to a dealer.


Nevertheless, there has been some light paying in the 5- t0 10-year area of the curve. 5- and 10-year traded mostly in a tight range around a basis point higher of 0.455% and 0.855% respectively.


2s/10s swaps steepened up by a basis point to 66.75bps



January PPI below forecast

Official data released earlier today showed that PPI in January was up 9.5% year-on-year, down from 10.5% in the previous month and below economists’ expectation of 9.7% of growth.



New issues

  • Central Japan International Airport Co Ltd issued JPY6.2bn in 0.544%, February 25, 2028 bonds at JGBs + 34.5bps.


  • Chuo-Nittochi sold JPY18bn in 1.000%, February 16, 2028 bonds.


  • Electric Power Development Co Ltd priced JPY20bn in 0.754%, February 18, 2028 bonds at JGBs + 55bps.


  • Hiroshima Expressway raised JPY7bn via selling the following bonds:


    • JPY3bn, 1.435%, February 27, 2025 at JGBs + 9bps.

    • JPY4bn, 0.755%, February 28, 2033 at JGBs + 26bps.


  • Japan Railway sold JPY21bn worth of bonds as follows:


    • JPY12bn, 0.765%, February 25, 2033 at JGBs + 27bps.

    • JPY9bn, 0.359%, March 17, 2028 at JGBs + 13bps.


  • Japan Science & Technology Agency priced JPY20bn in 0.061%, February 21, 2025 bonds at JGBs + 12bps.


  • Kyoto Land Development issued JPY5bn in 0.504%, February 28, 2028 bonds at JGBs + 30.5bps.


  • Nagoya Expressway raised JPY14bn via selling the following bonds:


    • JPY2bn, 0.755%, February 24, 2033 at JGBs + 26bps.

    • JPY3bn, 0.424%, February 24, 2028 at JGBs + 22.5bps.

    • JPY4bn, 0.161%, February 24, 2026 at JGBs + 16.5bps.

    • JPY5bn, 0.611%, February 22, 2030 at JGBs + 21bps.


  • National Institutional for Academic Degrees & Quality Enhancement of Higher Education sold JPY5bn in 0.359%, March 17, 2028 bonds. Priced at JGBs + 13bps.


  • Sapporo City priced JPY28bn in 1.435%, February 20, 2043 bonds at JGBs + 9bps.


  • Sumitomo Mitsui Auto Service Co Ltd sold JPY10bn in 0.400%, February 17, 2026 bonds.


  • West Nippon Expressway issued JPY30bn in 0.499%, December 20, 2027 bonds at JGBs + 30bps.