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CROSS ASSET: JPY Demand & JGBs Sell Off As Ueda Speaks

CROSS ASSET
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USD/JPY moved to fresh session lows around 152.06 as BoJ Governor Ueda inferred that one headwind to further tightening has eased, with markets “slowly regaining stability”. This allowed Bank to remove the reference to having “time to consider” its next steps, with data-dependence front & centre.

  • Ueda remains non-committal to the timing of any further tightening as he reaffirms that the BoJ will tighten policy if the economy evolves in line with its projections.
  • He also brushes over comments pertaining to monetary policy from the Japanese political arena, choosing to give no comment.
  • USD/JPY back to 152.30 last.
  • Next meaningful technical support in USD/JPY located at the Oct 25 low (151.46), with the bullish technical picture still intact.
  • JGB futures trade down from ~144.20 to ~144.00, sticking within the pre-press conference range.
  • JGB yields out to 10s back to little changed on the day, 1-2bp higher on Ueda’s comments.
  • No lasting impact on super-long yields, with 20s and 30s 1.5-2.0bp lower on the day.
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USD/JPY moved to fresh session lows around 152.06 as BoJ Governor Ueda inferred that one headwind to further tightening has eased, with markets “slowly regaining stability”. This allowed Bank to remove the reference to having “time to consider” its next steps, with data-dependence front & centre.

  • Ueda remains non-committal to the timing of any further tightening as he reaffirms that the BoJ will tighten policy if the economy evolves in line with its projections.
  • He also brushes over comments pertaining to monetary policy from the Japanese political arena, choosing to give no comment.
  • USD/JPY back to 152.30 last.
  • Next meaningful technical support in USD/JPY located at the Oct 25 low (151.46), with the bullish technical picture still intact.
  • JGB futures trade down from ~144.20 to ~144.00, sticking within the pre-press conference range.
  • JGB yields out to 10s back to little changed on the day, 1-2bp higher on Ueda’s comments.
  • No lasting impact on super-long yields, with 20s and 30s 1.5-2.0bp lower on the day.