Python AWS Boto3: How to read files from S3 bucket?

Lambda provides 512 MB of /tmp space. You can use that mount point to store the downloaded S3 files or to create new ones.

s3client.download_file(bucket_name, obj.key, '/tmp/'+filename)
...
blank_file = open('/tmp/blank_file.txt', 'w')

The working directory used by Lambda is /var/task and it is a read-only filesystem. You will not be able to create files in it.