Futures Holding Weaker At Lunch, BoJ Ueda's Semi-Annual Report Weighs

At the Tokyo lunch break, JGB futures are holding weaker, -10 compared to the settlement levels, but off session lows.

• There hasn’t been much in the way of domestic data drivers to flag, outside of the previously outlined PPI and Bank Lending data.
• However, the local market appears to have been weighed down by comments from BoJ Governor Ueda in his Semi-annual Report on Currency and Monetary Control. (See link)
• “Now within sight that the price stability target of 2 percent would be achieved in a sustainable and stable manner toward the end of the projection period of the January 2024 Outlook Report, as various data and anecdotal information from firms had gradually shown that the virtuous cycle between wages and prices had become more solid.”
• Cash US tsys are dealing little changed in today’s Asia-Pac session, after richening 4-7bps yesterday, ahead of today’s US CPI data and the release of the FOMC Minutes.
• Cash JGBs are cheaper (flat to 1bp), apart from the 10-year. The benchmark 10-year yield is 0.6bp lower at 0.793% versus the YTD high of 0.802%, set earlier in the week.
• The swaps curve has bear-steepened, with rates 1-3bps higher. Swap spreads are wider across maturities.