Futures Cheaper Overnight, BoJ Policy Decision Due

In post-Tokyo trade, JGB futures are weaker, closing -8 compared to settlement levels, after a typically subdued start to the week, with investors keeping to the sidelines ahead of a busy week.

• US tsys finished the NY session flat to 2bps cheaper, ahead of Wednesday’s FOMC Decision. Corporate issuance was also touted as a driver for today's sell-off. That said, volumes were light.
• US 2- and 5-year yields made fresh YTD highs, with the 10-year stopping just shy of its high of 4.3486%.
• US equities bounced but pared the early rally. They continue to ignore the evolving Fed outlook and instead re-focused on tech. A Bloomberg report that Apple is in talks to build Google's Gemini AI engine into the iPhone boosted risk appetite.
• Nevertheless, the local market’s focus today is likely to be the BoJ Policy Decision, with Nikkei adding to recent reports across multiple newswires that the central bank is to end YCC and ETF purchases along with the heavily sourced exit of negative interest rates.
• While a move in March is not set in stone, we anticipate the BoJ to announce the attainment of its 2% price stability target and exit NIRP. (See MNI BoJ Preview here)