Futures Remain Richer But Below Overnight Levels After Tokyo CPI Beat

In Tokyo morning trade, JGB futures are richer, +11 compared to settlement levels, but have pared overnight gains after Tokyo CPI data surprised on the upside.

• The Tokyo October CPI print comfortably beat expectations in terms of the headline. It printed at 3.3% y/y versus 2.8% forecast (prior was 2.8%). The ex-fresh food (core) measure was 2.7%y/y versus 2.5% forecast (2.5% prior). The core measure which excludes fresh food and energy came in at 3.8%y/y versus 3.7% expected (prior was 3.9%).
• In terms of the detail, prices were up 0.9% m/m (seasonally adjusted). The core measure rose 0.7%m/m, versus flat in September. The core measure excluding energy as well was also firmer at 0.3% m/m, but only modestly above the September 0.1% pace.
• Assisting the move away from overnight highs, US tsys have ticked lower in recent dealings. Cash US tsys sit ~2bps cheaper across benchmarks.
• Cash JGBs are slightly mixed beyond the 1-year (+1.9bps), with yields 0.4bp lower to 0.9bp higher. The benchmark 10-year yield is unchanged at 0.875%, above BOJ's YCC soft limit of 0.50% but below its hard limit of 1.0%. It is also lower than the cycle high of 0.892% set yesterday.
• Swap rates are slightly higher across maturities, with swap spreads are mixed.