Futures Stronger, Supported By BoJ Summary Of Opinions & US Tsys

JGB futures add to post-Tokyo gains seen ahead of the weekend to be +7 compared to settlement levels in early Tokyo trade. The gains have been supported by stronger US tsys, which appear bid from the fallout from the political situation in Russia, and a dovish Summary of Opinions from the BoJ’s June meeting. According to the BoJ summary (See link):

• Easing should continue but cost of YCC is high, taking into account factors like preventing sharp fluctuations in interest rates in an exit, market functioning and communication with market participants: one member.
• No need to revise the conduct of YCC as curve distortions have dissipated and market functioning has improved: one member.
• Hasty policy change risks missing a chance to achieve price stability target: one member.
• It is highly likely CPI will decelerate toward the middle of fiscal 2023 but will not fall below 2%: one member.
• PPI services for May printed unchanged at +1.6% yoy, below expectations of +1.8%.
• Cash JGBs are little changed in early Tokyo trade with yield movements beyond the 1-year zone within +/- 0.4bp. The benchmark 10-year yield is unchanged at 0.369%, below the BoJ's YCC limit of 0.50%. The 20-year is 0.2bp lower, showing no concession on the curve, ahead of tomorrow’s supply.
• Swap rate and spreads are mixed so far in morning Tokyo trade.