Futures Follow Wider Post-U.S. CPI Impulse, Tankan Eyed

The post-U.S. CPI dynamics in wider core FI markets dominated in overnight dealing, allowing JGB futures to firm, before paring back from best levels, with the contract finishing pot-Tokyo trade +13 vs. settlement levels.

• There hasn’t been much in the way of tier 1 domestic news flow since yesterday’s close, although plenty of interest remains re: the Japanese fiscal situation and funding of the increased defence spending plans.
• The quarterly BoJ Tankan survey provides the highlight of today’s domestic, although we do remind you that our policy team has flagged its understanding that “Bank of Japan officials are awaiting March's Tankan survey to assess whether corporate inflation expectations continue to firm despite falling oil prices, offering the prospect of a virtuous cycle of higher prices and wages that is considered integral to any shift in the bank's easy policy settings in 2023.”
• Elsewhere, we will see the latest core machine orders reading, final industrial production data and BoJ Rinban operations covering 1- to 10- & 25+-Year JGBs.