Broader Impulse Drags Futures Lower Overnight, 20-Year Supply Due

The impulse from the broader core FI space dragged JGB futures lower in after-hours trade, with the contract finishing post-Tokyo dealing 15 ticks below settlement levels. Initial technical support is located at the Aug 12 low (152.99).

• Local COVID & geopolitical headlines will continue to be eyed, but there has been little in the way of meaningful knock-on impact for markets from those matters thus far.
• A quick look at the headlines since the Tokyo close:
• Japanese PM Suga confirmed that Japan will expand its COVID state of emergency to a further 8 prefectures.
• Meanwhile, source reports in the local press have suggested that we should expect record budget requests across Japanese ministries & agencies for FY22/23. There have been suggestions that the requests will total over Y110tn (US$1tn) for the first time.
• 20-Year JGB supply is due today, with the latest PPI services print also set to cross.