JAPAN DATA: Jobless Rate Steady, But Job-To-Applicant Ratio Falls To Fresh Lows
Earlier data showed mixed June labor market conditions. The unemployment rate was steady at 2.5%. This was in line with market forecasts. The unemployment rate has been steady at 2.5% since March of this year. This is just up from cycle lows of 2.4%. However, the job to applicant ratio rose fell to 1.22 from 1.24 prior, which was also below the 1.25 consensus expectation. This is the lowest job-to-applicant ratio since 2022. The chart below plots this ratio (it is inverted on the chart) against Japan's unemployment rate (the orange line on the chart). Job offers fell by -1.2%m/m, to be down 1.9%y/y, which is around the recent pace.
- The number of people employed fell by 50k after a surge of +330k in May. This metric has fallen in 4 out of the last 5 months. The number of people not in the labor force fell by 50k as well, helping keep the unemployment rate steady.
- The still tight labor market is a positive for the wages outlook, all else equal but the weakness in the job-to-applicant ratio is implying some upside risks.
Fig 1: Japan Unemployment Rate & Job To Applicant Ratio (Inverted)
Source: Bloomberg Finance L.P./MNI
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AUSSIE BONDS: ACGB Jun-35 Supply Faces A Lower Yield But A Similar Curve
The Australian Office of Financial Management (AOFM) will today sell A$1200mn of the 2.75% 21 June 2035 bond, issue #TB145. The line was last sold on 2 May 2025 for A$900mn. Bidding is likely to be shaped by several key factors:
- The current yield for this bond is approximately 10bps below the level of the previous auction and 60bps below the high recorded in early November 2024.
- The 3/10 yield curve is around the same level as the previous auction but sits 20bps below its recent high.
- Notably, investor sentiment toward longer-dated global bonds has improved over June.
- The inclusion of the Jun-35 line in the XM basket may also lend support to demand.
- Results are due at 0200 BST / 1100 AEST.
AUSSIE BONDS: AUCTION PREVIEW: ACGB Jun-35 Supply Due
The Australian Office of Financial Management (AOFM) will today sell A$1200mn of the 2.75% 21 June 2035 bond, issue #TB145. The line was last sold on 2 May 2025 for A$900mn.
- The sale drew an average yield of 4.2413%, at a high yield of 4.2425% and was covered 3.4444x. There were 34 bidders, 13 of which were successful and 6 were allocated in full. The amount allotted at the highest yield as a percentage of the bid at that yield was 94.2%.
- This week's ACGB supply is above the top end of the recent average weekly issuance of $1500-2000mn, with A$1000mn of the 2.25% 21 May 2028 bond 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.
MNI EXCLUSIVE: MNI Discusses RBA's International Outlook
