In Tokyo morning trade, JGB futures are holding weaker but off session cheaps, -8 compared to settlement levels.

• Japan's industrial production rose 1.4% in September compared with last month, marking the first rise in two months.
• Retail sales fell 2.3% in Sept. from a month earlier, compared to a median estimate of -0.3%.
• Offshore investors returned to being net buyers of local bonds last week. In four out of the last 5 weeks we have seen positive inflows into this space. In terms of outbound flows, we saw local investors continue to dump offshore bonds.
• Cash US tsys are 1-2bps richer in today’s Asia-Pac session after yesterday’s bear-flattener. Focus now turns to today’s weekly claims, personal income/spending and MNI’s Chicago PMI data.
• Cash JGBs and swaps are little changed across benchmarks ahead of today’s BoJ Policy Decision.
• All, but one of the 53 analysts surveyed by Bloomberg expect the current policy rate of 0.25% to be maintained, with market pricing aligning with this expectation.
• Since April, the BoJ’s guidance has indicated a gradual rate increase if economic activity and inflation trends align with the central bank’s projections.
• However, an additional precondition for future rate hikes has emerged, emphasising stability in overseas economies and financial markets. (See MNI BoJ Preview here)