Futures Stronger, Light Local Calendar, BoJ Rinban Later

In Tokyo morning trade, JGB futures are holding in positive territory, +6 compared to settlement levels.

• A solid post-US CPI sell-off extended into Thursday's trade, resulting in a new pullback low of 144.32 for JGBs. According to MNI’s technicals team, A stronger reversal higher is required to signal the end of the recent corrective phase. The bull trigger has been defined at 147.74, the mid-January high. A break would resume the uptrend. Moving average studies remain in a bull-mode set-up, highlighting an uptrend. For bears, a resumption of weakness would potentially open the 144.60 support.
• Cash US tsys are dealing 1-2bps richer in today's Asia-Pac session after finishing Thursday with a slight twist-steepening.
• (Bloomberg) -- Bond traders are readying for 10-year US Treasury yields surpassing 5% as the scenario of no interest rate cuts by the Federal Reserve this year looks increasingly possible. (See link)
• The cash JGB curve has twist-flattened, with yields 0.5bp higher to 2.5bps lower. The benchmark 10-year yield is 2.2bps lower at 0.849% versus the YTD high of 0.871% set yesterday.
• Swaps are richer, with rates 1-3bps lower across maturities. Swap spreads are tighter out to the 10-year and wider beyond.
• Today, the local calendar sees Industrial Production and Capacity Utilisation data alongside BoJ Rinban operations covering 1- to 10-year JGBs.