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Cash Bonds Little Changed, BoJ Minutes: March Move Not A Shift To Monetary Tightening

JGBS

In Tokyo morning trade, JGB futures remain stronger, but the overnight gains have been pared, +8 compared to settlement levels. This partly reflects a slight cheapening in cash US tsys in today’s Asia-Pac session.

  • Locally, the BoJ Minutes for the March meeting showed some board members said changes in monetary policy settings undertaken in March don’t represent a shift to monetary tightening as the nation is still in the process of achieving its 2% stable inflation goal. Some members said prices could rise more than expected although this was not a significant risk. One member said it was appropriate to proceed slowly but steadily with policy normalisation according to economy and inflation. (per BBG)
  • The Monetary Base rose 2.1% in April from a year ago.
  • Cash JGBs are little changed out to the 30-year and 1bp richer beyond. The benchmark 10-year yield is 0.4bp higher at 0.895% versus the YTD high of 0.933%.
  • The swaps curve has twist-steepened, pivoting at the 20s, with rates -2bps to +3bps. Swap spreads are tighter out the 10-year and wider beyond.
  • Today, the local calendar will also see Consumer Confidence data alongside a Liquidity Enhancement Auction for 1-5-year OTR JGBs.
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In Tokyo morning trade, JGB futures remain stronger, but the overnight gains have been pared, +8 compared to settlement levels. This partly reflects a slight cheapening in cash US tsys in today’s Asia-Pac session.

  • Locally, the BoJ Minutes for the March meeting showed some board members said changes in monetary policy settings undertaken in March don’t represent a shift to monetary tightening as the nation is still in the process of achieving its 2% stable inflation goal. Some members said prices could rise more than expected although this was not a significant risk. One member said it was appropriate to proceed slowly but steadily with policy normalisation according to economy and inflation. (per BBG)
  • The Monetary Base rose 2.1% in April from a year ago.
  • Cash JGBs are little changed out to the 30-year and 1bp richer beyond. The benchmark 10-year yield is 0.4bp higher at 0.895% versus the YTD high of 0.933%.
  • The swaps curve has twist-steepened, pivoting at the 20s, with rates -2bps to +3bps. Swap spreads are tighter out the 10-year and wider beyond.
  • Today, the local calendar will also see Consumer Confidence data alongside a Liquidity Enhancement Auction for 1-5-year OTR JGBs.