Futures Richer Overnight Spurred By A Post-FOMC Rally In US Tsys

In post-Tokyo trade, JGB futures are stronger, closing +15 compared to settlement levels, after US tsys reacted positively to a less hawkish than feared message from Fed Chair Powell and the FOMC. A “Higher for Longer” message was delivered but the market focused on Powell’s comment in the press conference that "I think it's unlikely that the next policy rate move will be a hike".

• Cash yields were down over double digits before profit-taking set in. The 2-year fell 12bps to 4.92%. Nevertheless, it closed back under the key 5% mark at 4.960%. The 10-year richened as much as 11bps to 4.58% but finished at 4.63%.
• Ahead, of the FOMC meeting, the ISM manufacturing index fell 1.1pts to 49.2 in April, so back into contractionary territory after the previous month’s upside surprise.
• (Bloomberg) The yen advanced more than 3% against the dollar late in New York, fuelling speculation that the Japanese authorities intervened for a second time this week to support the currency after a prolonged bout of weakness. (See link)
• Today, the local calendar sees the BoJ Minutes of the March Meeting alongside Monetary Base and Consumer Confidence data.
• The MoF will also conduct a Liquidity Enhancement Auction for 1-5-year OTR JGBs.