BoJ Gov. Ueda Says Rates Could Be Raised Next Month

At the Tokyo lunch break, JGB futures are holding in negative territory, -12 compared to the settlement levels, after dealing in a narrow range.

• (RTRS) “BoJ Governor Ueda said the central bank could raise interest rates next month, depending on economic and price data available at the time.”
• "Our decision on the bond-buying taper and interest rate hikes are two different things," Ueda told parliament. "There's a chance we could raise interest rates at our next policy meeting, depending on economic, price and financial data and information available at the time," he said. (See link)
• (DJ) “The JGB market may gradually start to digest the contents of the Bank of Japan's June meeting this week, says Tomonobu Yamashita, rates strategist at BofA Securities Japan, in a recent research report. The brokerage continues to expect an increase in the BOJ's policy rate to 0.25% at the July meeting and anticipates the 10-year JGB yield to rebound to its recent peak of around 1.1% in the near term and rise to 1.25% by the end of 2024.”
• The cash JGB curve has bear-steepened, with yields flat to 4bps higher. The benchmark 10-year yield is 0.9bp higher at 0.944% versus the cycle high of 1.101%.
• The swaps curve has twist-steepened, pivoting at the 10s, with rate movements bounded by +/- 1bp. Swap spreads are mostly tighter.