Cash Bonds Little Changed, PPI Services Slightly Below Forecasts

In Tokyo morning trade, JGB futures are holding weaker, -9 compared to settlement levels.

• Japan's PPI for services printed slightly below forecasts for July. It came in at 2.8%y/y versus 2.9% projected by the consensus. The June rise was revised up to a 3.1% gain (originally reported as a 3.0% rise).
• Despite losing y/y momentum the m/m rise still accelerated to 0.3% from 0.1% in June. Given the y/y trajectory from last year though, base effects may still see y/y services PPI momentum wane as we progress through H2 of this year.
• ICYMI, Japan’s minister for digital transformation, Kono Taro, who has also served as foreign minister and defence minister, became the third lawmaker to enter the race for the next prime minister. He joins Shigeru Ishiba, another former defence minister, and Takayuki Kobayashi, a former minister for economic security, as officially declaring their candidacy to lead the ruling Liberal Democratic Party. (per BBG)
• Cash US tsys are ~1bp richer in today’s Asia-Pac session after yesterday’s modest cheapening.
• Cash JGBs are little changed across benchmarks. The benchmark 10-year yield is flat at 0.891% versus the cycle high of 1.108%.
• Swap rates are flat to 1bp higher. Swap spreads are mixed.