Futures Return To Overnight Closing Levels, Post-Tokyo CPI Cheapening Pared

At the Tokyo lunch break, JGB futures are richer and at overnight closing levels, +13 compared to settlement levels, after initially cheapening on the back of higher-than-expected Tokyo CPI data.

• There hasn’t been much in the way of domestic drivers to flag, outside of the previously outlined Tokyo October CPI data.
• A paring of an early Asia-Pac session cheapening in US tsys has assisted the recovery in JGB futures. Cash US tsys sit ~1bps cheaper across benchmarks.
• Cash JGBs are slightly mixed, with yields 0.6bp lower to 0.8bp higher. The benchmark 10-year yield is 0.1bp higher at 0.876%, above BOJ's YCC soft limit of 0.50% but below its hard limit of 1.0%. It is also lower than the cycle high of 0.892% set yesterday.
• Results of this morning's Rinban operations covering 3- to 25-year+ JGBs are due before the afternoon session commences.
• Swap rates are also slightly mixed, with swap spreads mixed.