Overnight Gains In Futures Pared After A Stronger Tankan Survey

In Tokyo morning trade, JGB futures remain richer, +28 compared to settlement levels, but have pared overnight gains after Q4’s Tankan Survey showed an improvement in sentiment among large Japanese manufacturers.

• The main index for sentiment among large manufacturers was +12, the highest level since March 2022, compared with +9 in September. That was higher than economists' forecast for +10 and marked the third straight quarter of improvements.
• Japan PM Kishida will front the local media today (6:15 pm local time) in which a funding scandal involving his ruling LDP party is expected to feature (see BBG link).
• Cash tsys are dealing little changed in the Asia-Pac session little changed ahead of tonight’s FOMC rate decision at 1300ET and Fed Chair Powell's presser at 1430ET. PPI data is released beforehand.
• The cash JGB curve has bull-flattened, with yields flat to 1.6bps lower. The benchmark 10-year yield is 0.3bps lower at 0.719% versus last week’s low of 0.622%.
• Swaps are slightly richer out to the 30-year, with swap spreads slightly wider.