JGBS: Bear-Steepener After A Poor 40Y Auction, FOMC Minutes Later Today

JGB futures are weaker and at session lows, -4 compared to the settlement
levels, in afternoon trading.

* There hasn't been much in the way of domestic drivers to flag, outside of the
previously outlined Trade Balance and Machine Orders data.
* Cash US tsys are slightly cheaper in today's Asia-Pac session ahead of the
release of the May Meeting FOMC Minutes later today.
* The cash JGB curve has bear-steepened following today's lacklustre 40-year

  auction, with yields flat to 4bps higher. The benchmark 10-year yield is
  1.5bp higher at 0.995%, a new cycle high.

* The 40-year yield zone is 2.0bps in post-auction trading and approximately
4bps higher on the day.
* The swaps curve has bear-steepened, with rates flat to 4bps higher.
* Tomorrow, the local calendar sees Weekly International Investment Flow, Jibun
Bank PMIs and Machine Tool Orders data alongside BoJ Rinban Operations
covering 1-10-year JGBs.