Reaction To Issuance Story Eyed, 40-Year Supply Due

After Wednesday's Tokyo close the Nikkei released a source report which suggested that the Japanese government is planning to sell Y22.1tn of JGBs to finance the FY21 supplementary budget requirements. This applied some modest pressure to futures in post-Tokyo trade, before the space tracked the broader gyrations in the longer end of the U.S. Tsy curve, albeit with a degree of underperformance, leaving the contract -4 at the close. Local reaction to this story and the twist flattening witnessed on the U.S. Tsy curve will set the tone in early Tokyo dealing. A reminder that a formal announcement on issuance matters surrounding the supplementary budget will hit on Friday.

• Services PPI data and 40-Year JGB supply dominate the broader domestic docket on Thursday.