JGBS: Cash Bonds Little Changed Out To 20Y But Richer Beyond

For July, export and import prices both rose in m/m terms. Export prices were up 1.6%, while import prices were up 2.4%m/m. For import prices this was the first m/m rise since January of this year. In y/y terms, both export and import prices were still in negative territory, but up from the June levels. Export prices were -5.4%y/y, while imports were -10.4%. 

• The chart below plots y/y changes in USD/JPY versus import prices y/y. To end July USD/JPY was up a touch in y/y terms. If current spot levels prevail, (currently around 147.80), USD/JPY will remain positive in y/y terms to end September (note USD/JPY was 152.03 end Oct last year).
• This implies some upside to import price y/y momentum in the near term, albeit fairly modestly. If USD/JPY holds around current level to end September, we would be up +2.9% in y/y terms.  

Fig 1: Japan Import Prices & USD/JPY, Y/Y 

Source: Bloomberg Finance L.P./MNI 

The Australian Office of Financial Management (AOFM) will today sell A$1200mn of the 4.25% 21 December 2035 bond. The line was last sold on 9 July 2025 for A$1200mn. Bidding is likely to be shaped by several key factors: 

• The current outright yield is 5-10bps lower than the previous auction and approximately 50bps lower than the peak in late 2024.
• The 3/10 yield curve is around the same level as the previous auction but sits around 20bps below its recent high.
• On the negative side, the auction comes amid weaker sentiment toward longer-dated global bonds.
• However, the line is included in the XM basket.
• While some factors may limit the overall strength of bidding, there is an expectation of continued firm pricing at today's auction.
• Results are due at 0200 BST / 1100 AEST.

The Australian Office of Financial Management (AOFM) will today sell A$1200mn of the 4.25% 21 December 2035 bond. The line was last sold on 9 July 2025 for A$1200mn. The line was opened via syndication on 24 July 2024 for A$11.5bn. 

• The last sale drew an average yield of 4.3442%, at a high yield of 4.3475% and was covered 2.6500x. There were 29 bidders, 16 of which were successful and 12 were allocated in full. The amount allotted at the highest yield as a percentage of the amount bid at that yield was 3.5%.
• This week's ACGB supply is at the top of the recent average weekly issuance of $1500-2200mn, with A$1000mn of the 2.75% 21 November 2029 bond due on Friday.
• During the first half of 2025-26, the AOFM plans to: issue a new October 2036 Treasury Bond (by syndication and subject to market conditions); conduct 2 Treasury Bond tenders most weeks; hold 1-2 Treasury Indexed Bond tenders each month.
• Issuance of Treasury Bonds (including Green Treasury Bonds) in 2025-26 is expected to be around $150 billion. Issuance of Treasury Indexed Bonds in 2025-26 is expected to be between $2 billion and $3 billion. 
• Results are due at 0200 BST / 1100 AEST.