Futures Lower Overnight But Tokyo CPI Undershoots Expectations

In post-Tokyo trade, JGB futures are cheaper, closing -10 compared to settlement levels, after US tsys finished 9-15bps cheaper across the major benchmarks with the curve flatter. An upward revision to Q1 US GDP on the third reading and softer than forecast Initial Jobless Claims pressured tsys. Q1 GDP was revised higher to 2.0% Q/Q a rise of 1.4% had been expected.

• Tokyo CPI for May comes out lower across the board with the annual headline rate printing at +3.1% y/y versus expectations of +3.4%. The core and core-core measures also undershoot estimates printing +3.2% y/y and +3.8% y/y versus 3.4% and 4.0% respectively. The data would be expected to support JGBs in early Tokyo trade.
• The jobless rate for May prints in line with expectations at 2.6% with the jobs-to-applicant ratio declining slightly to 1.31 from 1.32.
• Industrial Production (preliminary) for May is due shortly.
• BoJ Rinban operations covering 3- to 25+ Year JGBs are also today.