Futures Sharply Weaker Overnight, Market Awaits BoJ Dep. Gov. Uchida Speech

In post-Tokyo trade, JGB futures are sharply weaker, closing -30 compared to settlement levels, despite US tsys finished 2-3bps cheaper across benchmarks after holding in narrow ranges.

• There was a continued focus on Fed speakers: Fed Kashkari popped up in morning trade positing that 2-3x 25bp cuts this year "seems appropriate". Fed Kugler said she could not close the door to policy action at any upcoming meetings, including March. Fed Collins said waiting until 12-month inflation hits 2% for the central bank to begin cutting interest rates would be waiting too long.
• Traders await 10:30am speech and 2:30pm press conference by BoJ Deputy Governor Shinichi Uchida. Uchida will likely explain the latest Outlook Report released in January to business leaders as BOJ deputy governor always has a chance to speak to business leaders after the BOJ quarterly Outlook Report.
• Apart from the Outlook Report, he is expected to talk about the near-future outlook for monetary policy. The focus is whether he will leave markets’ speculation over March policy changes triggered by the summary of opinions at the January meeting alone or he will tone down or calm the markets’ view.
• Today, the local calendar also sees weekly International Investment Flows, BoP Current Account Balance, Bank Lending and Tokyo Avg Office Vacancies data, along with BoJ Rinban Operations covering 1-25-year JGBs.