Futures Finish Mid-Range After Two-Way Overnight Session, Rinban Due

JGB futures generally mimicked U.S. Tsys in overnight dealing, albeit with the lower beta, closing post-Tokyo trade mid-range, +2 vs. settlement levels.

• We haven’t seen much in the way of meaningful domestic headline flow since yesterday’s close, with regional focus still on the latest North Korean missile test.
• Domestic market chatter has turned towards the investment intention outlines for the domestic life insurer and pension fund community, with the potential for a meaningful BoJ policy pivot, in addition to the volatility observed in wider financial markets alongside the well-documented, elevated FX-hedging costs that Japanese investors currently face, generating even deeper than normal interest in the capital deployment plans of this sizable investor cohort (the semi-annual outlines will likely filter out in the next couple of weeks or so).
• Looking to the local docket, it will be the latest round of BoJ Rinban operations that headline today, with the purchases covering the 1- to 10- & 25+-Year zones.