Cash Bonds Cheaper After BoJ Summary Of Opinions

In Tokyo morning trade, JGB futures are holding weaker, -16 compared to settlement levels, after the release of the BoJ Summary of Opinions for the June MPM.

• (MarketWatch) The BoJ’s policy board discussed “the possibility of raising interest rates further amid concerns over lingering inflationary pressure.” "There is a possibility that prices will deviate upward from the baseline scenario if another pass-through of recent cost increases to consumer prices happens," one of the nine policy board members said. "It is therefore necessary for the bank to consider whether further adjustments to monetary accommodation are needed from the perspective of risk management," the member said. "The bank needs to normalize its balance sheet in a timely and appropriate manner while communicating with market participants," one board member was quoted.
• Cash JGBs are 1-3bps cheaper across benchmarks. The benchmark 10-year yield is 2.4bps higher at 0.999% versus the cycle high of 1.101%.
• BoJ Rinban Operations for 1-10-years JGBs are due.
• The swaps curve has bear-steepened, with rates 1-3bps higher. Swap spreads are tighter.