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In Tokyo morning trade, JGB futures are stronger, +8 compared to settlement levels, after reversing overnight weakness tied to US tsys.

• BOJ'S UEDA SCHEDULED TO APPEAR IN PARLIAMENT FROM 2:30 PM JT.
• Cash US tsys are slightly cheaper in today's Asia-Pac session after yesterday’s modest sell-off. The Federal Reserve is expected on Wednesday to lower its overnight benchmark rate for a third straight meeting to 3.50%-3.75%, but with dwindling support for continued easing, the bar for further cuts next year moves higher.
• Cash JGBs are slightly mixed across benchmarks, with the 5-year outperforming ahead of today’s supply. The benchmark 5-year yield is 1.6bps lower at 1.445% versus the cycle high of 1.462%, set yesterday.
• While this month’s 10-year and 30-year auctions have delivered strong results, last month’s 2-year auction (28 November) was poor.
• Ahead of the prior 2-year auction, Reuters reported that the Japanese government will increase issuance of 2-year and 5-year JGBs from January as part of its stimulus-funding plan. Issuance is expected to rise by around 100bn each for the 2-year and 5-year tenors. Reuters also noted that there are no changes to the planned issuance for 10-40-year tenors.
• Swap rates are little changed. 

Source: Bloomberg Finance LP

The USD/CNY fix printed at 7.0773, versus a BBG market consensus of 7.0764. This leaves the fixing error remaining positive, today at only +9pips down from Monday's +25. This continues to point to a steady outlook for the yuan. Spot USD/CNH is a little higher post the fixing, last around 7.0711/15 and off the earlier low of 7.0687. Recent highs are just above 7.0800, in terms of a potential upside focus point.

The USD/CNY fix printed at 7.0773, versus a BBG market consensus of 7.0764. This leaves the fixing error remaining positive, today at only +9pips down from Monday's +25. This continues to point to a steady outlook for the yuan. Spot USD/CNH is a little higher post the fixing, last around 7.0711/15 and off the earlier low of 7.0687. Recent highs are just above 7.0800, in terms of a potential upside focus point.