Back From Early Peaks

JGB futures hit the lunch bell 6 ticks above yesterday’s settlement levels, but some 28 ticks shy of morning highs, with the broader swings in risk appetite surrounding the fire and fighting around a Ukrainian nuclear power station in the driving seat. Cash JGBs run 0.5-2.5bp richer on the day, with the 5- to 7-Year zone lagging as the curve flattens, perhaps impacted selling in futures on the move back from richest levels.

• Note that JGB futures continue to operate within the confines of the recently observed range.
• There hasn’t been much in the way of meaningful domestic headline flow, with Japanese PM Kishida flagging the importance of FX rates moving in a stable manner. He also made a pledge that the government will do all it can to manage the economy and fiscal policy in an appropriate manner. Kishida then noted that he wants the BoJ to continue to aim for the 2% inflation level, while stressing that he will pick the “most appropriate” successor for BoJ Governor Kuroda. Finally, Kishida pointed to pressure on oil producing nations to boost supply, while Chief Cabinet Secretary Matsuno noted that the cabinet has approved a Y360bn response re: higher oil prices (with more to come next FY, if required).