Futures Holding Gains At Lunch, BoJ Adachi Supports Unchanged Policy

At the Tokyo lunch break, JGB futures are holding richer at 148.66, +14 versus settlement levels, after trading in a narrow range in the morning session.

• As far as domestic drivers are concerned, the previously outlined BoJ Minutes for the April Meeting has been the highlight in Tokyo morning trade. The focal point of BoJ members’ comments were commodity prices and the sustainability wages and their impacts of inflation.
• Bloomberg reports that BoJ Board Member Seiji Adachi said that it’s too early to adjust policy due to significant uncertainties over the BOJ’s base case for inflation. (See link)
• The cash JGBs curve bull flattens with the futures linked 7-year zone (-1.2bp lower) leading. The benchmark 10-year yield is 0.9bp lower at 0.384%, below the BoJ's YCC limit of 0.50%.
• Swap spreads are generally wider across the curve.