Japanese Yen (Jpy)
BEs quickly sulk lower into the month-end close as a meager index extension, rallying nominals and a rudderless risk tone lent little support.
JPY rates market was weaker after domestic and US data. Swaps from the 10-year point were bid but there was earlier offers in 5-year.
BEs ignored the shifting risk tone today, forging higher as the backdrop deteriorated. Attention now shift to month-end flows tomorrow.
After a quiet start to the week, both sides of the Atlantic are seeing strong issuance, with USD supply from non-domestic issuers booming.
There has been trade in super long sector of the JPY swap curve. Extra bond issuance will test the BOJ in the coming months. CACIB sold Samurai Bonds.
BEs were guided higher by macro backdrop today when compared to late day levels yesterday, though volumes and conviction remained low, sources report.
QUICK is now publishing prototype alternative JPY LIBOR rates. Extra virus-related issuance is not expected to increase interest rate volatility.
Longer JPY swaps have been better offered ahead of a 40-year JGB auction this morning. The BOJ is prepared to counter negative virus effects.
The long-end of the curve has steepened in calm trade. Japan's government and central bank have pledged a continued joint coronavirus response.
10-year JPY swaps have been offered after domestic data and on worries over the global economy. There was earlier receiving in the 2- to 7-year area.