JPY Swaps: JGB future trims gains after 30y sale; Yen intervention eyed

Japanese Yen Notes
JGB future trimmed gains as demand for 30y JGBs was weaker. Swappers were cautious as recent currency move might trigger an intervention.

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  • JGB future trims gains after 30y JGB sale

  • Cautious trade as BOJ seen intervening the currency market

  • New issues


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JGB future trims gains after 30y JGB sale

The USD rates market was little moved on Monday, offering limited trade directions to players in Japan. JGB future was up by 12-ticks in the morning, but such momentum faded after the JGB sale.


Earlier today, the MOF sold JPY899.3bn worth of its JPY900bn 30-year 1.4% JGBs (Number 78R) at tender. The auction drew bids worth 3.08 times, down from 3.49 times last month which was also the 16-month high back then. Average yield was 1.257%. The tail widened from 0.10 to 0.14.


The lead bond future was only 3-ticks higher soon after the reopening of the market from lunch break before being marked 7-ticks higher at 148.65 at time of writing. The yield on the benchmark 10-year JGB was marginally higher at 0.428%.



Cautious trade as BOJ seen intervening the currency market

Dealers said there was some pre-auction paying in 30-year on the previous day and the tenor was quite subdued on the day with muted reaction even after the auction results.


10-year saw some decent amount of forward flow and limited outright interest. A trader said recent move in the yen that brought USD/JPY to above 140 has triggered thoughts that there might be intervention by the BOJ. Players were therefore cautious before making any significant move, according to the source.


10-year was marked a basis point lower at 0.5905% in mid-afternoon Tokyo trading. The short-end has been underperforming longer maturities on the rally amid the weakness in the currency. 2-year was marked less than 0.5bp lower, and 2s/10s swaps flattened out by 1.25bps to 52.25bps. The curve made a downward shift of around 1.75bps from the 10-year point.



New issues

  • Aiful Corp raised JPY15bn via selling 0.87% June 12, 2026 bonds.