Futures Richer Overnight But All Tokyo CPI Measures Print Higher Than Expected

In post-Tokyo trade, JGB futures are richer, closing +17 compared to settlement levels, after US tsy yields declined 8-11bps across benchmarks amid rising risk aversion. This move came despite the release of Q3 US GDP data, which revealed the fastest annualised growth rate in two years (+4.9% versus +4.5% estimate).

• Supporting the demand for US tsys, the Core PCE Price Index showed +2.4% q/q, below last quarter’s +3.7% and the market’s estimate of +2.5%.
• Additional factors boosting US tsys included robust demand metrics for the $38 billion 7-year auction and jobless claims data, which showed a reading of 210k versus 207k est. and 198k prior.
• The 2-year US tsy yield finished 10bps lower at 5.03%, while the 10-year yield declined 11bps to 4.85%.
• October Tokyo CPI prints a headline rate of 3.3% y/y versus expectations of an unchanged +2.8%. CPI ex fresh food and ex fresh food and energy printed respectively 2.7% y/y and 3.8% y/y versus estimates of +2.5% and +3.7% and prior +2.5% and +3.8%. Higher-than-expected CPI prints should provide some pressure for JGBs in early rounds of the Tokyo session.
• Today, the BOJ will conduct Rinban operations covering 3- to 25-year+ JGBs.