JPY Swaps: JGB future jumps despite no BOJ surprise; Curve flatter to 10y

BOJ building sign
The widely expected BOJ decision has prompted a jump in JGB future. 10y swaps were offered briefly and flattened the curve to that point.

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  • JGB future jumps after BOJ’s pause

  • Curve flatter to 10y as 10y given after BOJ

  • New issues


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JGB future jumps after BOJ’s pause

It wasn’t a surprise at all that the BOJ board members voted unanimously to keep its ultra-loose monetary policy rate unchanged when the board concluded this month’s MPM earlier today. Cash rate and 10-year yield target would stay at -0.1% and 0% respectively, and the YCC band continues to work at +/-50bps. The central bank would also keep buying 10-year JGBs at fixed rate every business day. The economic assessment was unchnaged although it noted that Japan’s economy had picked up.


The decision had been widely expected. However, JGB future jumped after the BOJ. It traded mostly around 148 in the morning but spiked by 39-ticks after the announcement. A trader said the meeting results have confirmed that the central bank would stand pat despite recent hawkish stance by other key central banks, giving traders more confidence about long positions in JPY rates.


In mid-afternoon Tokyo trading the lead bond future was 13-ticks higher at 148.21, and the yield on the benchmark 10-year JGB was 1.5bps lower at 0.406%.



Curve flatter to 10y as 10y given after BOJ

USD/JPY re-climbed to levels above 140.5 after BOJ, after easing off levels above 141 in US trading on Thursday. However, this has not triggered any paying at the superlong-end of the curve. 30-year, for example, only traded unchanged at 1.046% around mid-day.


A trader said players have mostly well prepared for this BOJ decision and so there has not been any strong reaction. 10-year was paid up 3bps at 0.635% in the morning session but was then offered down 3.5bps after the BOJ.


The swap curve flattened out to 10-year before steepening beyond that point. 2s/10s swaps were 2.25bps flatter at 52bps, and 10s/20s and 10s/30s swaps were 0.5bp and 0.75bp steeper at 37.75bps and 45.5bps respectively.



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  • Ichigo Inc sold via Mizuho JPY2bn in 1.3%, June 22, 2026 bonds.