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Futures Firmer Overnight, Defence Matters In Limelight

JGBS

JGB futures added 14 ticks in overnight dealing, tracking the gyrations witnessed in broader core global FI markets, going out just shy of best levels.

  • The already released, firmer than expected domestic household spending and wage data may apply some modest pressure to JGB futures around the Tokyo re-open, although an uptick observed in U.S. Tsy futures and ACGBs will likely provide some spill over-related counter.
  • Note that Yomiuri has suggested that the Japanese Ministry of Defence's budget request for FY23 will reach a record high of Y5.5tn, on top of "item requests" which will boost the final amount, citing the latest meeting of the ruling Liberal Democratic Party's Security Research Commission.
  • On the defence front it is worth noting that since yesterday’s Tokyo close we have seen a Chinese missile launch over Taiwan, with some of the missiles landing in Japan’s EEZ. This comes after a bilateral meeting between the Chinese & Japanese Foreign Ministers was cancelled.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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