Futures A Touch Stronger, Back Within Established Range

In post-Tokyo trade, JGB futures gained ground, finishing +7 compared to settlement levels, while US Tsys largely consolidated after three consecutive days of cheapening. After the bell, the US Tsy 2/10 cash curve displayed a mild flattening bias, despite a flurry of economic data and US earnings.

• Overnight strength has brought JGB futures back within the range of 147.40-147.92 , which it has generally traded in since early April. Yesterday, JGB futures briefly fell below the bottom of the range, following the weaker lead from US Tsys on Monday.
• Late Tuesday we saw BoJ Governor Ueda once again play down talk of the need to alter the BoJ-government accord re: inflation, at least for now, playing into the policy continuity mindset, at least in the immediate term.
• The monthly Reuters Tankan survey for April showed big Japanese manufacturers remain gloomy for a fourth straight month as jitters over Western banks added to slowing global growth, dimming prospects for an export-led recovery.
• The local calendar is scheduled to release February Capacity Utilisation and the final estimate of Industrial Production for February.