Following US Tsys Cheaper As Fed Chair Powell Speaks On 60 Minutes

In Tokyo morning trade, JGB futures have extended overnight weakness seen ahead of the weekend to be -63 compared to settlement levels.

• The local calendar has seen January’s Jibun Bank PMI Services (53.1 vs 51.5 in Dec.) & Composite (51.5 from 50 in Dec) print, ahead of Labour and Real Cash Earnings tomorrow.
• (Bloomberg Economics) -- Japan’s wage growth likely staged a temporary pickup in December, as strong profits led companies to boost winter bonuses. (See link)
• US tsy futures have continued their move lower in early morning Asia-Pac trading, with Fed Chair Powell speaking on 60 Minutes in a pre-recorded interview. He mentioned that there needs to be more disinflation evidence to cut rates. Cash US tsys have opened trading 4-8bps cheaper, with the 2Y yield 8.0bps higher at 4.44%, while the 10Y yield is 7.0bps higher at 4.09%.
• The cash JGBs are cheaper across the curve, with 10-30-year zone leading (5-6bps cheaper). The benchmark 10-year yield is 5.2bps higher at 0.725% versus the Nov-Dec rally low of 0.555%.
• The swaps curve has bull-steepened, with rates 1-6bps higher. Swap spreads are tighter out to the 30-year.