Futures Holding Weaker, National CPI Data Tomorrow

In the Tokyo afternoon session, JGB futures are holding weaker, --21 compared to the settlement levels.

• There hasn’t been much in the way of domestic data drivers to flag, outside of the previously outlined Trade Balance and Jibun Bank PMIs. Tokyo Condominiums for Sale (Feb) data is due later, along with an Enhanced-Liquidity Auction for 5-15.5 year OTR JGBs.
• (Bloomberg) -- Governor Kazuo Ueda said the Bank of Japan saw the risk of potentially having to raise interest rates rapidly if it waited too long to end the bank’s massive easing program, a view that prompted the board to make that move on Tuesday. There was an option for the BOJ to wait much longer to completely confirm its stable inflation target had been achieved, but doing so would have greatly raised upside inflation risks, potentially forcing aggressive tightening, Ueda said Thursday in response to questions in parliament. (See link)
• The cash JGB curve has twist-flattened, pivoting at the 10s, with yields 1bp higher to 2bps lower. The benchmark 10-year yield is 0.1bp lower at 0.74% versus the YTD high of 0.801%.
• The swaps curve has bear-flattened, with rates 1-2bps higher. Swap spreads are wider.
• Tomorrow, the local calendar sees National CPI and Weekly International Investment Flow data, along with BoJ Rinban Operations covering 1-25-year JGBs.