EU REAL ESTATE: Kojamo: Debt Reduction (VVOYHT; Baa2 neg/NR/NR)

• Analysts have been quick to highlight that the latest greenback selling has notably been paired with an adjustment lower for the US curve, which has been pertinent alongside a significant reduction in geopolitical risk premia. With US 10yr yields slipping to a 2-month low below 4.2% this morning, the Japanese yen is comfortably the best performing currency in G10.
• Price action has extended the pullback from last week’s highs to 3.4%, which has likely been assisted by a cleaner positioning profile following last Monday’s spike to 148.03. The shooting star candle formation highlights a reversal of the recent recovery and today’s weakness in particular has been exacerbated on a break of short-term trendline support, drawn from the May lows.
• As noted, the first support comes in at 142.80 (Jun 13 low), however the key short-term support remains at 142.12, the May 27 low.
• Potentially providing an additional yen tailwind, it is worth noting the Q2 Japan Tankan survey painted a resilient picture and improved capex outlook, which we wrote about in more detail here: https://mni.marketnews.com/3TgwKpZ

Source: Bloomberg Finance L.P. / MNI

• Another gilt auction where the LAP (lowest accepted price) is below the pre-auction mid-price.
• This follows two soft auctions last week. There was a little blip lower visible on the gilt futures chart, but only of 5 ticks or so which was almost immediately retraced. We are broadly trading at pre-bidding deadline prevailing levels now.