Futures Nudge Lower Overnight, Continued BoJ Presence Limits Move

The wider sell off in core global FI markets applied some light pressure to JGB futures in overnight dealing, with the contract finishing just off worst levels of the session, -10 vs. Tokyo settlement. The spill over from that move may extend in today’s session, although yields out to 10s will be capped by the continued presence of the BoJ’s fixed rate operations (10-Year JGB yields finished Tuesday trade at ~0.245%).

• Note that Nikkei has reported that a ruling LDP Party panel is seeking a review of Japan’s primary surplus target. This comes just one day after Finance Minister Suzuki flagged the need to stick to the current target of achieving a primary surplus in FY25/26, so any change to that goal seems unlikely at first glance.
• Preliminary Q1 GDP data and 5-Year JGB supply headline the domestic docket on Wednesday.