20-Year JGB Supply Due

JGB futures ultimately finished overnight dealing at unchanged levels, unwinding the early Gilt-inspired uptick as U.S. Tsys pulled away from best levels during NY hours.

• Tsy futures have firmed a little during early Asia trade, which may lend support to JGBs at the Tokyo open.
• 20-Year JGB supply headlines the domestic docket today.
• Elsewhere, BoJ Governor Kuroda will appear in front of parliament, again. Don’t expect much new from Kuroda, given his previous insistence that the BoJ will maintain its easing stance, given the cost-push nature of the current inflationary dynamic, coupled with the fact that the BoJ expects inflation to fall back below target in the next FY.
• On that note, late Monday saw Kyodo sources report that the BoJ will raise its inflation forecast for the current FY to above 2.5% at its next policy meeting, on the back of a weaker JPY and higher raw material costs.
• Late Monday also saw the chief of the Keidanren business lobby flag the weaker yen as a key driver of inflation, which is burdening businesses and consumers alike, while he highlighted the potential for further JPY weakening.