Contained End To The Week, Twist Steepening Evident

JGB futures operated in a contained range in the grander scheme of things, failing to challenge the extremities witnessed in the overnight session during Tokyo dealing. Gyrations in U.S. Tsys were in the driving seat for the most part, outside of the early super-core CPI-related blip lower, while weakness in the longer end of the JGB curve became more pronounced, before fading.

• JGB futures are +10 into the close, while cash JGBs are 3.5bp richer to 2bp cheaper, with 40s the only benchmark softening on the day.
• The swap space has been more non-committal, operating within -/+0.5bp of yesterday’s closing levels at typing.
• In terms of the details, national CPI data saw the headline and excluding fresh food measures experience Y/Y moderations that were in line with expectations, owing to government subsidies surrounding energy. Meanwhile, the excluding fresh food and energy metric saw a larger than expected uptick, topping expectations by 0.1ppt to print a fresh cycle high at +3.5% Y/Y (incoming BoJ Governor Ueda had previously pointed to peak inflation being in the rear view).
• Services PPI data headlines Monday’s domestic docket.