Firmer During The Morning

Pretty much one way trade for JGBs during the Tokyo morning, with the latest turns in the Russia-Ukraine situation supporting the space. That allowed futures to build on modest overnight gains during the morning session, hitting the lunch bell +21. Cash JGBs run 0.5-3.0bp richer on the day, bull flattening.

• The recovery from session lows in domestic equities had no tangible spill over for JGBs.
• In terms of local data, both industrial production and retail sales provided misses in M/M terms. Our policy team has subsequently flagged its understanding that “downside risks to the economy will be heightened at the March Bank of Japan policy meeting amid the latest tepid economic data and geopolitical risks driving up energy costs that could lead the central bank to issue a rare statement before the end of the fiscal year on maintaining financial market stability.”