Foreigners Continue To Cover Shorts In Futures

JGB futures shed 17 ticks in overnight dealing, finishing a little above worst levels, with participants set to assess the partial unwind of some of the post-CPI Fed-rate hike premium that took place in the wake of Thursday’s Fedspeak.

• Note that after-hours comments from Japanese PM Kishida pointed to no hesitation when it comes to fiscal spending in a bid to fight inflation, while he also noted that a great degree of caution is required re: fighting the spread of COVID, while flagging that the he is not thinking of imposing related movement restrictions at present.
• Note that JPX data (released late on Thursday) revealed continued short covering of futures positioning on the part of foreign investors, akin to what was observed in the weekly Japanese security flow data covering the wider Japanese bond space. The widow maker trade maintains its reputation, for now.
• Friday’s local docket is limited at best, with nothing in the way of notable economic release/JGB supply.