Returning From The Long Weekend

Tokyo returns from the long weekend and participants will have to assess Monday’s cheapening impulse transmitted from the wider core global FI sphere. A quick reminder that JGB futures added 18 ticks in the final overnight session of last week, aided by a bid in U.S. Tsys, which was based on a moderation in odds of a 100bp rate hike at the upcoming FOMC meeting. Expect the contract to come under some pressure in early Tokyo trade today. There hasn’t been much in the way of major domestic news flow to digest since the close of Tokyo trade on Friday.

• BoJ Rinban operations covering 1- to 10-Year JGBs headline the domestic docket today. Further ahead, Thursday’s BoJ decision provides the main point of interest this week, with no change in monetary policy setting s foreseen, while the Bank is set to mark down its immediate GDP projections and mark its immediate CPI forecast higher.