JPY Swaps: Dovish BOJ minutes; 10y offers flatten 2s/10s

• Dovish BOJ minutes; 10y offers flatten 2s/10s

• New issues

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Dovish BOJ minutes; 10y offers flatten 2s/10s

The Japanese financial market re-opened today, after an extended long weekend which began last Wednesday. Dealers said the market had a lot to catch up after closing for three days, and the lower-than-expected April unemployment in the US didn’t quite trigger a selloff in JPY rates. The BOJ MPM minutes released earlier today, on the other hand, showed that a few members saw emerging positive signs that the country would achieve the central bank’s 2% price stability target. This prompted thoughts that the BOJ would maintain its existing ultra-lose monetary policies for an extended period of time.

JGB future was up by 23-ticks intraday before closing the day 11-ticks higher at 148.66. The yield on the benchmark 10-year JGB was down half a basis point at 0.41%.

Trading in swaps stayed cautious as players were watching how the market would react to the various events while the market was closed. A swapper noticed activities around the long-end of the curve. 10-year saw relatively busier flow and traded down a basis point to 0.58% after lunch break, after mostly 2-way flow in the morning when it traded little changed at 0.59%.

2s/10s swaps flattened out by 0.75bp to 49.75bps, after making an upside break above 50bps last week.

New issues

• Sumitomo Mitsui Financial Group is planning to sell TLAC bonds via SMBC Nikko. Details of the offer have not been decided but pricing will be as early as late-May.