Early Richening Extends A Touch

The early, modest richening impulse extended as the Tokyo morning wore on, with futures a little shy of their morning peak at the lunch break, +8, while cash JGBs were flat to 2.5bp richer, with 20s leading the bid. Futures still haven’t fully pared their post Tokyo CPI losses. Receiver side swap flows have seemingly aided the rally, with swap spreads flat to tighter across the curve.

• Recent rhetoric from BoJ Governor Kuroda reiterated well-trodden themes in Bank communique, stressing the need for continued easing, while pointing to a cost=push inflation dynamic being in play at present.
• Elsewhere, PM Kishida stressed that the government will refrain from commenting on FX rates, while underscoring the need for continued close work with the BoJ.