Futures Lead The Way Lower

Cash JGBs trade little changed to ~1.5bp cheaper across the curve, with 7s providing the weakest point, aided by the extension of the overnight sell off in JGB futures, with the latter running 18 ticks lower than yesterday’s settlement, a little off worst levels of the day. The wider core global FI impetus facilitated the modest cheapening observed during Tokyo hours.

• Fiscal matters dominated local headline flow, with Finance Minister Suzuki noting that there was no change to the government's goal of balancing the primary budget balance during FY25. This came after several media outlets pointed to the government dropping the timeframe reference in an economic policy roadmap draft.
• The latest round of 2-Year JGB supply went well, with the low price coming in above that foreseen in the BBG dealer survey, while the price tail held relatively tight and the cover ratio moved higher, comfortably above its 6-auction average.
• Elsewhere, local data revealed a modest downtick for the unemployment rate, softer than expected industrial production and generally in line, to slightly firmer than expected retail sales readings.
• Q1 capex & corporate profit data headline Wednesday’s local docket.