JGBs Gain, Gov't Mulls State Of Emergency In Tokyo

JGB futures have crept higher from the off and last trade at 151.97, 5 ticks above last settlement. The move has been aided by a retreat in the Nikkei 225, with the local coronavirus situation still taking centre stage in Japan. Cash JGB yields sit lower, with 40s outperforming.

• Japan's central gov't refrained from acting on the plea of Tokyo Gov Koike & her counterparts from three neighbouring prefectures to impose a state of emergency across the area, but several press reports noted that PM Suga's cabinet could move ahead with the idea as soon as this week. NHK reported that a new state of emergency could be more limited than April's.
• Elsewhere, a Jiji report suggested that the gov't might strengthen its law on virus management, while the Nikkei noted that PM Suga will hold a presser today to outline the gov't's plan for fighting the spread of infections.
• In local data, the final reading of Jibun Bank M'fing PMI for the month of December was revised to 50.0 from 49.7. This is the highest reading since April 2019.
• There is little of note left on Japan's economic docket today. On the supply front, focus moves to the auctions for 10-Year and 30-Year debt, due Wednesday and Friday respectively.