Cash Bonds Slightly Cheaper, Suzuki: Inflation Remains A Concern

At the Tokyo lunch break, JGB futures are holding stronger, +8 compared to settlement levels.

• Outside of the previously outlined Household Spending data, there hasn't been much in the way of domestic drivers to flag.
• The local calendar will also see Leading & Coincident Indices later.
• Japanese Finance Minister Shunichi Suzuki says inflation remains a concern even after Japanese workers recently achieved significant pay increases. (per BBG)
• (Bloomberg) Rising speculation of an interest-rate hike by the Bank of Japan as early as this month is sapping investor demand for 10-year notes in a busy corporate bond market and driving up premiums on new issuance. (See link)
• Cash US tsys are dealing flat to 1bp cheaper, with a steepening bias, after yesterday’s holiday. Focus on tonight’s Non-Farm Payrolls release. (See MNIs Payroll Preview here)
• Cash JGBs are mostly cheaper across benchmarks, with yields flat to 1bp higher. The benchmark 10-year yield is 0.2bps lower at 1.083% versus the cycle high around 1.10%.
• Swap rates are slightly lower across maturities, with swap spreads somewhat mixed.