Cheaper Overnight On Friday As March BoJ Hike Fears Build After Reports

In post-Tokyo trade on Friday, JGB futures are sharply cheaper, closing -27 compared to settlement levels.

• On Friday, concurrent BoJ sources reports from both JiJi News (See link) and Reuters. Both reports eye the possibility of a March BoJ rate hike should the wage negotiation phase with unions next week continue to show signs of healthy wage growth.
• Also on Friday, US tsys finished marginally richer ahead of the weekend. The US 2-year yield declined initially to 4.40% from 4.49% following the US Employment Reports, before closing 3bps lower at 4.47%. The 10-year yield finished 1bp lower at 4.07%.
• US tsys gapped lower on the higher-than-expected jobs gain of 275k vs. 200k est. but reversed course just as quickly as markets digested the large down revisions to January (229k from 335k, private to 177k from 317k).
• The unemployment rate surprisingly increased two-tenths from 3.66% to 3.86% (cons 3.7), poking above October’s 3.84 for the highest since Jan’22. The FOMC eyes 4.1% for end-2024.
• The February CPI report on Tuesday is the last key data point ahead of the March FOMC meeting.
• Today on the data front we have Q4 GDP revisions, which should be aided by the strong Capex rise recovered in the quarter (post the initial estimates). Also out are Feb money stock figures and Feb P machine tool orders.