Political & Rinban Matters Eyed

JGB futures shed 2 ticks in overnight trade.

• Questions surrounding the extent of PM in waiting Kishida's fiscal spending may have pressured the space in post-Tokyo dealing, as he pointed to the need for tens of trillions of yen of stimulus. Kishida's former rival in the race to sit atop the LDP, Sanae Takaichi, is set to assume a senior role in government, and she also backs aggressive fiscal spending. However, Takaichi also wants to include employment in the BoJ's formal mandate, which may provide some counter to any hawkish market reaction.
• NHK has reported that the Tokyo Metropolitan Government will lower the COVID-19 alert level by one notch from the highest level, with the decision set to be made by the COVID-19 panel later today.
• BoJ Governor Kuroda will speak again on Thursday after a Wednesday address failed to introduce anything in the way of meaningful fresh material. Elsewhere, Japanese retail sales and industrial production data will cross. 2-Year supply and the release of the BoJ's quarterly Rinban outline (due after the Tokyo close) round out the local docket. There is some speculation that the BoJ may cut the purchases covering JGBs with up to 10 years until maturity.