Richer, Futures At Session High, BOJ Rinban Results Due

At the Tokyo lunch break, JGB futures are richer, +41 compared to settlement levels, and at a Tokyo session high. Futures had initially softened on the release of a stronger-than-expected Q4 Tankan Survey of large Japanese manufacturers, but that softness was more than reversed by the break.

• There hasn’t been much in the way of domestic drivers to flag, outside of the Tankan survey.
• 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 ICYMI).
• Cash tsys are dealing ~1bp richer in the Asia-Pac session 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 0.4bp to 2.3bps lower. The benchmark 10-year yield is 1.2bps lower at 0.709% versus last week’s low of 0.622%.
• Results from today’s BOJ Rinban operations covering 1-3-year, 5-10-year, and 25-year+ JGBs are due.
• Swaps are slightly richer out to the 30-year, with swap spreads slightly wider.