JPY Swaps: Data weaker than expected; 10y offers emerge; Long-end steeper

Abstract data 9 Nov 2020
Domestic data was weaker than expected, prompting receiving in 10-year JPY swaps and steepening of the curve from there.

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  • Weaker-than-expected domestic data backs further rally in JPY rates

  • 10y offers emerge after earlier bid; 20y given

  • New issues


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Weak-than-expected domestic data backs further rally in JPY rates

The drop in crude oil prices and weaker-than-expected domestic have both contributed to demand for JPY rates today.


Official data released earlier today showed that retail sales in Japan was up 5% year-on-year in April, down from 6.9% in March and much lower than economists’ forecast of 7.1%. Industrial production was forecast to be down 0.3% on an annual basis in April, after a 0.6% of contraction in the previous period. The market had expected it to recover and stage a 2% worth of growth. Consumer confidence index for May was in line with expectation at 36, up from 35.4 in April.


JGB future was up by 25-ticks soon after market open, but such momentum eased in late-day trading when it was up by only 10-ticks at 148.64. The yield on the benchmark 10-year JGB was up marginally at 0.429%.



10y offers emerge after earlier bid; 20y given

Trading in JPY swaps has turned busier today with some decent amount of activities seen from the 10-year point.


A dealer reported slightly better paying in 10-year in the morning when it traded up to 3bps higher. Receiving emerged around mid-day and it traded down to 1.75bps lower of 0.59%. 10-year was last seen changing hands at 0.635% before being marked about 0.75bp lower of 0.6%. 2s/10s flattened by half a basis point to 53bps.


20-year traded in several clips and in a tight range between 0.9625% and 0.9675%, compared to those traded up to a tad above 1% on Tuesday while slightly


10s/20s swaps steepened up by 0.25bp to 28bps.



New issues

  • Fuyo General Lease raised JPY40bn via selling bonds in two equal tranches as follows:


    • 0.435%, June 7, 2028 at JGBs + 33bps.

    • 0.27%, June 5, 2026.


  • Mitsui Fudosan Co Ltd sold JPY130bn worth of bonds as follows:


    • JPY100bn, 0.81%, June 6, 2033 at JGBs + 38.9bps.

    • JPY30bn, 0.36%, June 6, 2028 at JGBs + 26bps.


  • Resona Holdings priced JPY25bn in 0.415%, June 7, 2028 bonds at JGBs + 31bps.


  • Sapporo Holdings issued JPY20bn in 0.45%, June 6, 2028 bonds at JGBs + 35bps.


  • SBI Holdings Inc raised JPY150bn via selling the following bonds:


    • JPY45bn, 1.15%, June 6, 2028.

    • JPY105bn, 0.95%, June 5, 2026.