Futures Holding Weaker, H/H Spending Weaker Than Expected

In Tokyo morning trade, JGB futures are holding in negative territory, -17 compared to settlement levels.

• Earlier, household spending data for Jan was weaker than expected printing at -6.3% y/y, versus -4.1% forecast and prior of -2.5%. This is a measure of real household spending, and it is now back to early 2021 lows.
• Consumption is a key focus point for the authorities and the BoJ outlook. Firmer wages growth is seen as critical to driving firmer spending trends as we progress through 2024. Given anecdotes around wage negotiations are firmer for this year compared with last year, today's weaker household spending print may not impact BoJ's thinking.
• Other data showed the current account stronger than expected for Jan. It printed ¥438.2bn, versus the -¥330.4bn forecast. In adjusted terms were ¥2727.5bn, against a ¥2074.4bn forecast.
• (Bloomberg) -- Japanese investors bought the largest amount of US sovereign bonds in four months in January, according to the Asian nation’s latest balance-of-payments report on Friday. (See link)
• Cash JGBs are cheaper, with the 20-year zone as the underperformer (+2.3bps). The benchmark 10-year yield is 1.2bps higher at 0.743% versus the February high of 0.772%.
• Today will see BoJ Rinban operations covering 1- to 10-year JGBs.
• Swaps are cheaper, with rates flat to 1bp higher. Swap spreads are mostly tighter.