Tokyo Returns

JGB futures will likely come under some pressure at the re-open, given the cheapening witnessed in U.S. Tsys since the pre-holiday overnight session close.

• The dynamic in the longer end of the curve will be interesting to watch, given the bear steepening move in U.S. Tsys on Wednesday, with the last couple of Tokyo sessions seeing the 10-/30-Year JGB yield spread edge away from multi-month flats. A reminder that some of the major domestic life insurers indicated a preference to add long end JGB exposure in recent interviews, which could support the longer end of the curve in any cheapening instances.
• On the COVID front, there has been suggestions that there could be a relatively imminent relaxation in Japanese border controls, with recent reports noting that a move on that front could come as soon as November 8.
• Household spending data and 10-Year JGBi issuance headline the local docket on Thursday.