Futures Stronger Overnight With US Tsys, Q4 GDP Due

In post-Tokyo trade, JGB futures are stronger, closing +11 compared to settlement levels, after US tsys recouped some of Tuesday’s post-CPI sell-off. US tsys bull-steepened, with yields 2-8bps lower. Comments from the Fed's Goolsbee, downward revisions to December PPI data, a rethink of the CPI data and a lack of follow-through selling presented a buying opportunity for the bond bulls.

• Chicago Fed’s Goolsbee stuck to his dovish guns stating that he doesn’t believe the last mile of the inflation fight is the hardest and that inflation can be a bit higher but remains on track.
• US PPI data for December was revised down from -0.1% to -0.2%.
• Elsewhere, UK headline and core inflation data printed softer than expected at respectively 4% y/y and 5.1% y/y.
• Today, the local calendar sees Q4 GDP (Prelim), December Industrial Production (Final) and December Capacity Utilisation data.
• Today will also see BoJ Rinban operations covering 1-5-year and 10-25-year+ JGBs.