Futures Close At Worst Levels

Little in the way of consistent movement was seen across the JGB curve, with yields marginally mixed for most of the day, while futures extended on their overnight losses, closing 16 ticks below yesterday's settlement levels, at worst levels of the day and sub-152.00.

• News flow has generally been light, with continued focus on the situation surrounding former PM Abe that we flagged earlier (although there has been little spill over for markets on that front). Elsewhere, BoJ Governor Kuroda spoke, noting that the BoJ policy review will focus on making the Bank's policy settings more sustainable as simply maintaining QQE with YCC will not be enough. Kuroda also noted that the review will not look at reducing the side effects of the Bank's ultra-loose policy stings. He also tipped his hat to the downside risks for the Japanese economy, once again.
• A firm enough 2-Year JGB auction was seen, with the low price topping dealer expectations at the margin (BBG survey pointed to 100.450), while the cover ratio moved back towards more normal levels and the tail narrowed, although we must stress that last month's 2-Year offering was poorly received, which muddies the usual comparative benchmarking. Real yield dynamics and collateral matters likely helped takedown.
• Friday will see the release of the latest Tokyo CPI print, labour market report and retail sales data.