Futures Pare Losses In The Tokyo Afternoon, Eyeing US Tsys Ahead Of JH Speeches

In the Tokyo afternoon session, JGB futures slightly pared losses, -7 compared to settlement levels, after dealing in a relatively narrow range in the morning session.

• There hasn’t been much in the way of domestic drivers to flag, outside of the previously outlined Tokyo CPI for August, which was a touch below expectations in terms of the headline and ex-fresh fruit measures.
• Accordingly, local participants have likely been on headlines and US tsys watch ahead of the keenly anticipated address by Fed Chair Powell at the Jackon Hole Symposium.
• US tsys are sitting little changed in Asia-Pac trade. The ranges have been relatively narrow, with the proximity to Fed Chair Powell's speech today a limiting factor.
• Cash JGBs are mixed across the curve, with yield movements bounded by -1.2bp (20-year) and +0.2bp (the futures-linked 7-year). The benchmark 10-year yield is unchanged at 0.656%, above BoJ's YCC old limit of 0.50% but below its new hard limit of 1.0%.
• Swap rates are mixed across the curve, with the belly underperforming. Swap spreads are narrower, part from the 40-year.
• Early next week, the local calendar sees June Leading and Coincident Indices on Monday and July Jobless Rate data on Tuesday.
• On Tuesday, the MoF plans to sell Y2.9tn of 2-year JGBs.