Futures Firmer Overnight, Liquidity Enhancement Auction & CPI Data Due

JGB futures added 18 ticks in overnight trade, going out shy of best levels after garnering support from the previously outlined bid in wider core global FI markets. Tokyo participants are set to assess the spill over from latest ECB decision and increased worry re: the prospect of a U.S. recession during the early rounds of Tokyo dealing.

• Domestic COVID matters have dominated local newswires this morning, although this isn’t expected to have much in the way of meaningful market impact.
• CPI data headlines today’s domestic docket, with the ex-fresh food measure for June expected to step up to +2.2% Y/Y in June vs. +2.1% prior. The BoJ's inflation target is +2.0%, but the Bank continues to stress that current price pressures are being driven by supply-side factors rather than demand-pull matters, allowing them to look through the recent uptick, with the Bank projecting a moderation in price pressures beyond the end of the current FY
• Elsewhere, the latest liquidity enhancement auction covering off-the-run 5- to 15.5-Year JGBs is due today.