Futures Cheapen Overnight, Tweaks To Balanced Budget Goal Inbound?

JGB futures shed 12 ticks in overnight trade as U.S. Tsy futures ran lower, although U.S. TY futures have edged away from Monday’s lows on the back of the previously fleshed out news re: EU sanctions on Russian oil exports. That could provide a light bid for JGB futures in early Tokyo trade.

• Domestic headline flow has focused on balanced budget matters, with NHK reporting that the government is looking to add a degree of flexibility into its primary budget goal, while Yomiuri was more specific, noting that the government will look to drop the reference to FY25 when it comes to its balanced budget goal. Elsewhere, NHK also reported that Japan will extend its employment subsidy program by 3 months.
• Tuesday’s local docket is headlined by the monthly labour market report, industrial production and retail sales prints, with 2-Year JGB supply also due.