Futures Range Bound, Domestic Focus Remains On Wages Growth

JGBs have drifted higher post the lunch time break, but at 144.33, -.09, remain well within this week's range. We have modestly outperformed US Tsy futures, which sit off session highs, but equally have displayed a fairly narrow range for the session.

• The main macro news today was the close to expected September wages data (see this link). The Economic Minister stated the country needs +5% wage growth for a number of years to play catch up after such a long period of deflation (see this BBG link).
• Still, the data won't shift views that the BoJ is unlikely to move away from accommodative policy settings before year end, something that Governor Ueda hinted at yesterday.
• In the cash JGB space, moves have been modest, the 10yr yield not drifting too far from 0.88%. The 20-40yr part of the curve are 1bps lower in yield terms. The 10yr swap rate sits at 1.0625%.
• The MoF sold 10yr inflation linker bonds, but the auction drew the lowest bid-to-cover ratio since 2017.