JPY Swaps: Longs bid as yen weaker despite Fitch's US ratings warning

Japanese Yen
USD/JPY shot higher despite Fitch's warning about downgrading US credit ratings. This has prompted paying in SL JPY swaps and the curve steepened up.

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  • JGB future down for the third consecutive day

  • Weaker yen despite Fitch’s US ratings warning; Long-end steeper

  • New issues


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JGB future down for the third consecutive day

The JPY rates market has been tracking the move in the USD rates market in overnight trading, marking the third consecutive day of losses.


On Wednesday, 2-year UST yield rose to its highest level since March, as the latest FOMC minutes showed that some members were supportive about further monetary policy tightening. Worries over the debt-ceiling negotiation also fuelled better selling interest in USD rates.


The lead bond future was down by 20-ticks after lunch break before being marked 14-ticks lower at 148.47 in mid-afternoon domestic trading.



Weaker yen despite Fitch’s US ratings warning; Long-end steeper

Elsewhere, the yen continued its deprecation move after Fitch Ratings said it might downgrade US credit ratings to reflect the worsening political standoff that’s preventing a deal to solve the nation’s debt ceiling crisis. The pair traded up to higher than 139.7 in Tokyo today and supported some paying at the superlong-end of the curve around mid-day. 20-year traded up to near 2bps higher of 0.985% while 30-year traded around 2.5bps higher of 1.0625%.


10s/20s and 10s/30s swaps steepened up by 0.75bp to 39bps and 46.75bps respectively, despite paying in 10-year at up to more than 5bps higher of 0.63% intraday.



New issues

  • Honda Finance raised JPY40bn via selling bonds in two equal tranches as follows:


    • 0.389%, June 20, 2028.

    • 0.26%, June 20, 2026.