Will Rinban Counter The Pressure?

JGB futures shed 8 ticks during overnight trade, with U.S. Tsys cheapening, finishing just off worst levels of the session.

• Fiscal matters have been at the fore in overnight news, a member of the Japanese finance ministry's debt-management panel told BBG that the country's target of balancing its budget by FY25 is essentially out of reach and "pushing for it too hard would derail the pandemic- hit economy." Elsewhere, the Japanese Defence Minister told the Nikkei that Japan plans to "boost defence spending without worrying about sticking to its long-standing limit of 1% of GDP."
• Also of note, NHK has suggested that preparations are being made so that the number foreign officials attending the upcoming Olympic Games in Tokyo is less than half of the previous estimate.
• BoJ Rinban operations covering 1- to 3-, 5- to 10- & 25+-Year JGBs headline locally on Thursday, with the monthly Japanese trade balance reading and core machine orders data also due.
• Participants will also be cognisant of the proximity to Friday's 20-Year JGB supply.