JPY Swaps: Longs bid; Steeper to 20y; 10y yield hits 9y high

Japanese Yen Notes
10-20y JPY swaps were briefly bid, steepening the curve to 20y. 10y JGB yield rose to its 9y high.

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  • 10y JGB yield hits 9y high

  • Longs briefly bid; Curve steeper to 20y


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10y JGB yield hits 9y high

JGB future extended losses today, tracking similar move in the USD rates market in overnight trading and as the rally in the Nikkei has dampened appetite for safe-haven assets.


In early-afternoon Tokyo trading the lead bond future was down 14-ticks at 146.32, and the yield on the benchmark 10-year JGB was up 1.5bps at its nine year high of 0.66%.


Current 10-year JGB yield level has become a concern and market participants are wary about some unscheduled BOJ actions.


Elsewhere USD/JPY rose pass the 146 level again. Players have given up hoping for an official intervention. Instead, some are looking for a “verbal” intervention which might strengthen the currency a tad.



Longs briefly bid; Curve steeper to 20y

The swap curve steepened up to 20-year and then shifted upward marginally. Flow wise, 10- and 20-year traded briefly at the open, backed by better paying interest there.


10-year went through a tad above 0.865%, up from previous close of around 0.825%. 20-year, on the other hand, traded through 1.35%, up from Monday’s close of 1.3175%.


2s/10s swaps steepened up by a basis point to 69.75bps while 10s/20s swaps were marginally steeper at just below 49.5bps.