Futures Can't Sustain Multi Week Lows, Capex, Wages Data & BoJ Speak Next Week

The break lower in JGB futures at the open, which came post the stronger Tokyo CPI print, hasn't had follow through. We got to lows of 144.49, levels last seen in early August. In latest dealings we sit at 144.56, -.17 versus settlement levels.

• The Tokyo CPI showed headline and core (ex fresh food) accelerating in y/y terms and comfortably above the 2% long term BoJ target. Excluding energy as well we are at 1.6%y/y, but picked up versus the July result.
• All else equal this should add to the BoJ confidence around achieving its inflation target sustainably, which is a key hurdle ahead of further reducing monetary accommodation. Financial markets stability remains the other watch point.
• Other data was more mixed, with the jobless rate rising, while IP and retail sales were close to expectations.
• Cash JGB yields have ticked higher, but only the 40yr has seen a yield gain in excess of 1bps. The 10yr yield is just over 0.905%
• Yields on swap rates have seen slightly larger yield moves, the 10yr above 0.91% at the time of writing.
• Looking ahead to next week, Q2 CAPEX is out on Monday. Then July labour cash earnings print on Thursday. BoJ speak is also on this day.
• On the debt sale side we have 10yr and 30yr debt auctions.