JPY Swaps: BOJ seen on hold; Early 10y offers; More SL bid

Mount Fuji Japan
JGB future extended gains as latest Ueda comments enforced belief that the BOJ would be on hold next week. 10y was offered in earlier trading.

Start a free trial to read this article

Join today to access all  Total Derivatives content and breaking news. Already a subscriber? Please Log In to continue reading.

Or contact our Sales Team to discuss subscription options.

Get in Touch
Blurred image of Total Derivatives article content

  • JGB future extends gains as BOJ seen on hold again

  • Early 10y offers; More long-end bid

  • New issues


Click here for SDR JPY IRS trades


JGB future extends gains as BOJ seen on hold again

JGB future extended gains today, as the market continued to price in less chance of a BOJ policy tweak after BOJ Governor Ueda reiterated on Tuesday that the central bank would maintain its easing program until its price goal is achieved. Indeed, CBA has given up thinking that the BOJ would tighten any monetary policy next week as the April data offers little evidence that the spring wage negotiations have spilled over a material pick-up in earning gains in Japan.


Strategist from SMBC Nikko also noticed a marked improvement in JGB liquidity as the disparity between JGBs and futures have shrunk to the lowest level since the contracts started trading in September. This has also supported better appetite for JPY rates.


The lead bond future was up by 12-ticks intraday before finally closing at 7-ticks higher of 148.84. The yield on the benchmark 10-year JGB was half a basis point lower at 0.414%.



Early 10y offers; More long-end bid

Dealers noticed busy 10-year flow, backed mainly by better receiving in the morning when it traded down to around 1.25bps lower of 0.575% intraday. Paying interest then emerged in the afternoon session and 10-year traded up to 0.61%.


20- to 30-year swaps saw further paying following slightly disappointing 30-year sale on the previous day. 20-year traded 1bp higher in early morning domestic trading while 30-year went through up to about 2bps higher in earlier trading before last seen little changed at just below 1.035%.


10s/30s swaps were marked 0.5bp flatter ta 45.25bps at time of writing.



New issues

  • Chugoku Electric Power sold JPY15bn in 1.810%, June 25, 2053 bonds.


  • Development Bank of Japan issued JPY10bn in 0.305%, June 14, 2030 bonds.


  • Fukuoka City priced JPY10bn in 0.225%, June 28, 2028 bonds at JGBs + 13bps.


  • GMO Financial Holdings Inc raised JPY7bn via selling 1.520%, June 19, 2026 bonds.


  • Hiroshima City priced JPY10bn in 0.225%, June 26, 2028 bonds at JGBs + 13bps.


  • Hokkaido Prefecture issued JPY20bn in 0.671%, June 30, 2033 bonds at JGBs + 25bps.


  • Miyagi Prefecture raised JPY25bn via selling the following bonds:


    • JPY10bn, 0.225%, June 29, 2028 at JGBs + 13bps.

    • JPY15bn, 0.794%, June 22, 2043 at JGBs + 33bps.


  • Nagasaki Prefecture sold JPY20bn worth of bonds in two equal tranches as follows:


    • 0.225%, June 26, 2028 at JGBs + 13bps.

    • 0.794%, June 16, 2043 at JGBs + 33bps.


  • Orix Corp issued JPY20bn worth of bonds in two equal tranches as follows:


    • 0.425%, June 13, 2028.

    • 0.850%, June 13, 2033.