Futures Holding The Overnight Downtick In Early Tokyo Trade

JGB futures are holding the overnight downtick in early Tokyo trade with pricing -21 versus settlement levels. In post-Tokyo trade, JGB futures had followed US tsys cheaper after they were pressured by heavy corporate issuance ahead of tomorrow’s US CPI release.

• Cash US tsys have opened dealing little changed in early Asia-Pac trade.
• A thin data calendar in Asia leaves participants on headline watch.
• During his appearance in Parliament, BoJ Governor Ueda stated that the central bank is not focused on any particular policy while reviewing its past strategies, and that monetary policy will be implemented as needed during this process. At the April policy meeting, the BoJ announced a comprehensive review of its ultra-loose monetary policy settings that have been in place since the 1990s. The review is expected to take between 1 to 1.5 years to complete, leading many market participants to anticipate a decisively dovish outcome.
• In early Tokyo trade, cash JGBs have cheapened across the curve, except for the 30-40 year zone, which has seen a 0.3-0.5bp richening. Yields are flat to 1.3bp higher, with the 1-year zone showing the weakest performance and the 3-year zone showing a relatively stronger performance. The benchmark 10-year yield has increased by 0.2bp to 0.420%, still below the BoJ's YCC limit of 0.50%.
• Swap rates are higher across the curve with wider swap spreads.