Tight In Tokyo

The Tokyo morning saw JGB futures hold to the confines of the range established in the overnight session, hitting the lunchbreak 4 ticks above Tuesday's settlement levels. The long end of the cash curve saw some marginal underperformance, allowing the curve to twist steepen, with swap spreads seeing incremental widening across most tenors.

• Local news flow has been light. PPI data met broader market expectations, with the rate of the Y/Y decline slowing in January.
• Comments from BoJ's Nakamura did little to alter the view re: the broader monetary policy review which is ongoing at present, as he reaffirmed the notion that the current easing framework is "working appropriately," while noting that he would like make adjustments to the scheme which promote sustainability.
• The liquidity enhancement auction for off the run 15.5-39 Year JGB headlines locally this afternoon.