Futures Firmer

JGB futures clung on to the coattails of the wider central bank-driven bid in core global FI markets in overnight trade, finishing +15, after backing away from best levels alongside U.S. Tsys into the NY close.

• Note that after Thursday’s Tokyo close we saw former BoJ Deputy Governor Hiroshi Nakaso note that he has been appointed to serve on a financial advisory body to APEC. Nakaso has been seen as one of the more prominent candidates in the race to success current BoJ Governor Kuroda (and is viewed as a more hawkish choice than current BoJ Deputy Governor Amamiya). The news has triggered some debate re: the chances of Nakaso being nominated as a potential successor to outgoing Governor Kuroda, with some suggesting that an appointment so close to the nomination window rules him out of the race, while others have suggested that he could easily resign from this new post if he was chosen as the next BoJ Governor.
• Finance Minister Suzuki has recently noted that no decisions have been made re: the next BoJ Governor as of yet.
• Futures are better bid at the open, last +26, as participants react to the ECB & BoE decisions & guidance, while also perhaps reflecting slightly better odds of Amamiya becoming the next BoJ Governor (he is seen as the best representation of a continuation candidate amongst the 3 main names touted for the role).
• Looking ahead, final services and composite PMI data, along with the latest round of BoJ Rinban operations (covering 1- to 5- & 10- to 25+-Year JGBs) headline domestically on Friday.