Bonds - JPY
The BOJ has warned Japanese banks to speed up their LIBOR transition preparations.
10y JPY swaps have been offered after the release of a very weak Q4 GDP report. 20y JGBs have richened on the curve ahead of new supply this week.
Listing of Asia Pacific bond issues likely to create hedge requirements across rates markets.
The 30y JPY spread dipped to a 2y low this morning. GPIF offset bond losses with equity and currency gains. Japan has been urged to issue digital yen.
A bias for virus-related foreign offers in longer JPY swaps continues to push swap spreads lower and clearing basis more negative.
JPY rates market participants await 40y auction results. Factors have been put forward for 10y strength and steepening in the 10s/20s curve slope.
There has been trade in the belly of the JPY swap curve after 5-6y swap rates dipped below zero. Downside risks are expected to keep the BOJ on hold.
The belly of the JPY swap curve has been in focus today. The BOJ is unlikely to change policy near-term. The IMF has upgraded its Japanese outlook.
JPY swap rates have dropped after the BOJ left its policy settings unchanged this afternoon but lowered its inflation forecasts slightly.
There has been trade in short JPY curve spreads as the market expects a BOJ growth outlook upgrade tomorrow.