Futures Stronger Overnight With US Tsys

In post-Tokyo trade, JGB futures are stronger, closing +16 compared to settlement levels, after US tsys finished 1-6bps richer across the major benchmarks. The curve flattened. US tsys observed narrow ranges yesterday, with little follow through on moves, firming through the European session as spillover from Bunds provided support to the wider space. There was little reaction to the latest round of data, the proximity to Thursdays CPI perhaps limiting activity. 10-year supply today.

• Bloomberg reports that the BoJ’s looser grip on benchmark 10-year yields is starting to shake up the outlook for short-term borrowing costs, with swaps traders betting that the central bank will end the world’s last negative interest rate policy in as little as eight months. (See link)
• Today the local calendar sees July M2 & M3 Money Stock along with July Machine Tool Orders data.
• In Asia-ex Japan today official CPI & PPI data from China provide the highlight, further out the US docket is thin with just MBA Mortgage Applications due.
• Today will also see BoJ Rinban operations covering 1- to 25-Year JGBs.