Reaction To U.S. CPI Eyed, 20-Year JGB Supply Due

JGB futures shed 13 ticks in overnight dealing and may come under fresh pressure in early Tokyo trade, with U.S. Tsy futures below their late night levels. The contract operated in a relatively wide range during overnight dealing, with the wider gyrations surrounding the U.S. CPI data release and subsequent repricing of Fed rate expectations front and centre.

• There hasn’t been much in the way of meaningful domestic news flow to digest since Wednesday’s Tokyo close
• On the inflation front, note that a RTRS poll revealed that “four out of five large Japanese firms are passing on higher commodity costs to customers or intend to do so, a Reuters poll found, a sharp rise from the previous survey six months ago as surging input prices and a weak yen drive up import costs.”
• 20-Year JGB supply and the final industrial production reading for May headline the domestic docket on Thursday.