Futures Sharply Higher As US Tsy Rally Extends Into Asia, Heavy Data Calendar Tomorrow

JGB futures are sharply higher at 146.48, +62 compared to the settlement levels, after hitting a multi-month high of 146.54.

• There hasn’t been much in the way of domestic drivers to flag, outside of the previously outlined speech from BOJ Board Member Adachi. To recap, the tone of the speech seemed similar to Governor Ueda’s recent remarks, namely the country's economy had yet to reach a stage where the central bank could debate an exit from ultra-easy monetary policy.
• Today's bid appears linked to an extension of yesterday's US tsy strength in today's Asia-Pac session. Dovish remarks by Fed Goolsbee aftermarket have added to bullish sentiment fueled by Fed Waller yesterday. Cash US tsys are 2-4bps richer across benchmarks.
• The cash JGB curve has richened beyond the 1-year. Yields are 0.9bp higher (2-year) to 8.4bps lower (10-year). The benchmark 10-year yield is at 0.693%. The 40-year has continued to underperform on the curve, 1.8bps lower at 1.940%, after yesterday's poor auction result.
• The swaps curve has bull-flattened, with swap spreads mixed across maturities.
• Tomorrow, the local calendar sees Retail Sales, Industrial Production, Weekly International Investment flows, Housing Starts and Consumer Confidence data.
• The MOF plans to sell Y2.9tn of 2-year JGBs.