Tight Overnight, BoJ Matters Eyed

JGB futures hugged a narrow range in overnight trade, finishing at unchanged levels, limited by the observance of the Thanksgiving holiday in the U.S. Tsy futures have turned bid since then, largely on worry surrounding the discovery of a new COVID variant in South Africa.

• A BBG interview with the newest BoJ board member, Junko Nakagawa, saw her point to a little strengthening in inflationary pressures, while she noted that the most desirable outcome when it comes to currency fluctuations is a reflection of economic fundamentals.
• Elsewhere, our policy team published their latest insight piece, flagging their understanding that the BoJ stands ready to buy additional government bonds to ensure the yield curve stays at low levels, as the newly-elected Liberal Democratic Party-led coalition helmed by Prime Minister Fumio Kishida moves ahead with a massive stimulus package.
• Tokyo CPI data headlines the local docket on Friday. Details of the JGB issuance plans surrounding the aforementioned fiscal package will also be released today.