JPY Swaps: Good 7-10y offers after data; FX-driven 2y flow
- JGB future firmer after data
- Good 7-10y offers; JPY move backs 2y bid
- New issues
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JGB future firmer after data
Weak domestic industrial production data and alarming retail sales data, together with the rally in the USD rates market, have backed a rebound in the JPY rates market today.
On Monday, USD treasury rose with 2-year retreating from nearly its 16-year high. The move was a continuous demand for safe haven assets due to the stronger-than-expected PCE inflation gauge that was released on Friday.
Official data released this morning showed that industrial production in Japan was down 2.3% in January year-on-year, compared to 2.4% of contraction in the previous month. Economists had forecast only 0.7% of negative growth. Retail sales in the same month was however up 6.3% year-on-year, beating market expectations of 4% of growth, and compared to 3.8% in the previous month.
JGB future closed the day 19-ticks higher at 146.65, and the yield on the benchmark 10-year JGB was half a basis point lower at 0.495%.
Good 7-10y offers; JPY move backs 2y bid
The rally in the bond future has prompted decent amount of receiving in the 7- to 10-year area of the swap curve.
A dealer reported offered-side flows in 10-year at down to below 0.82%, compared to those traded around 0.845% near market close on the previous day. 7-year has been busily traded and went through down to 0.605% near market close, compared to previous close of about 0.625%.
Elsewhere the JPY hovering around its recent weak levels against the USD has supported paying in 2-year at up to 1.25bps higher of 0.2%. 2-year was however marked 0.75bp lower at time of writing, leaving 2s/10s swaps 1.5bps steeper at 63.75bps.
- Deutsche Bank issued JPY10bn in 1.51% March 7, 2028 callables with single call at par in March 2027.
- Fuyo General Lease raised JPY50bn via selling the following bonds:
- JPY30bn, 0.3%, March 6, 2026.
- JPY20bn, 0.709%, March 7, 2028 at JGBs + 47bps.
- Mitsubishi UFJ Financial Group sold the following bonds:
- JPY27.5bn, March 7, 2034 that pays 1.47% till the single call at par in March 2033, then 45.7bps over JPY 6M Tibor.
- JPY49.5, March 5, 2027 that pays 0.77% till the single call at par in March 2026, then 31.8bps over JPY 6M Tibor.
- JPY46bn, March 7, 2029 paying 1.029% till the single call at par in March 2028, the JPY 6M Tibor + 39.7bps.
- JPY109.5bn, March 7, 2027 paying 0.606% till the single call at par in March 2024, then 37.4bps over JPY 6M Tibor.
Lead is MUMSS.
- Orient Corp issued JPY20bn worth of bonds in two equal tranches as follows:
- 0.37%, March 6, 2025.
- 0.839%, March 6, 2028 at 60bps over JGBs.
- Select Access Investment raised JPY12bn by selling the following bonds via DB:
- JPY10bn, 0.45%, March 15, 2024.
- JPY2bn, 0.6%, March 14, 2025.
- Sumitomo Mitsui Financial Group has launched a 4-tranche fixed-rate USD bond offer with final pricing expected later today:
- 3y bond at +125-130bps.
- 5y bond at +160-165bps.
- 7y bond at +175-180bps.
- 10y bond at +190-195bps.
Lead is SMBC Nikko.