Futures A Touch Lower Overnight, Rinban Due, Further Headwinds For Kishida

Weakness in U.S. Tsys applied some modest pressure to JGB futures in the final overnight session of last week, with the contract finishing just above worst levels of the session, -12 vs. Friday’s Tokyo settlement levels.

• Local headline flow sees continued headwinds for Japanese PM Kishida, after the minister for internal affairs and communications stepped down over the weekend, in the wake of revelations surrounding campaign finance irregularities. This threatens to put a further dent in Kishida’s approval ratings, which have already plummeted.
• Global core FI markets have seen a light bid crept in during recent trade, with Fedspeak and the COVID situation in China helping the firming. This may support JGB futures and limit any losses in cash JGBs after the Tokyo open.
• BoJ Rinban operations covering 1- to 10-Year JGBs headline the domestic docket today.