Off Worst Levels, But Still Softer On The Day

JGB futures initially extended on the overnight weakness in early Tokyo trade, before recovering from worst levels alongside broader core FI markets, leaving the contract 30 ticks below settlement levels at the break, with 7s representing the weak point on the cash curve, cheapening by ~2.5bp. Continued speculation continues to do the rounds re: the potential for an early rollback of the COVID-19 state of emergency declarations outside of Tokyo, with an official meeting on the matter set to be held after hours today.

• The BoJ hasn't yet stepped in with unscheduled JGB purchases, despite speculation that it could do so.
• 2-Year JGB supply headlines the local docket during the afternoon, with the aforementioned COVID meeting and the release of the BoJ's March Rinban plan set for after hours.