Amamiya’s Star Continues To Rise

The final overnight session of last week saw JGB futures pressured by the cross-market impulse stemming from the U.S. economic data (NFPs & ISM services survey), leaving the contract -34 at the close.

• Still, expect local matters to dominate in early trade this week after a Nikkei article noted that “Japan's government has approached Bank of Japan Deputy Gov. Masayoshi Amamiya as a possible successor to central bank chief Haruhiko Kuroda, people familiar with the matter said.” The article also highlighted that “a BoJ source declined to comment, saying they were unaware of the discussions.” This is likely to provide a bit of a bid for JGBs at the re-open, with Amamiya seen as the most dovish of the 3 major candidates to succeed Kuroda. Still, the piece highlighted that “the next BoJ chief will be tasked with charting a path to normal monetary policy after the U.S. Federal Reserve and other peers have all raised interest rates to fight inflation.” Amamiya chose not to comment on the report this morning, while Finance Minister Suzuki said he hadn’t heard of such discussions, while conceding that he is “out of the loop” on those matters, noting that he won’t be commenting on each candidate for the role.
• Elsewhere, Japanese Deputy Chief Cabinet Secretary Kihara stressed the desire for an economy whereby inflation rises on a sustainable and steady basis.
• Note that BoJ Governor Kuroda will appear in parliament this morning, with nothing else on the local docket.