Futures Subjected To Cross-Market Flows Overnight, Finish Unchanged

JGB futures finished overnight dealing at unchanged levels after participating in the violent cross-market post-U.S. CPI swings that we have flagged elsewhere. There may be fresh pressure kick in at today’s Tokyo re-open, as local participants react to Thursday’s U.S. CPI print.

• There was plenty of post-Tokyo focus on the potential for a fresh round of Japanese FX intervention, with an official from Japan’s MoF declining to make specific comments on the move that triggered such speculation in a recent round of communique.
• We have also seen Japanese Finance Minister Suzuki reaffirm previous messaging when it comes to the potential for such intervention.
• Meanwhile, BoJ Governor Kuroda once again stressed that the BoJ will maintain its easing stance, with inflation expected to moderate in ’23, as he re-highlighted the cost-push (not demand-pull) nature of current price pressures.
• 5-Year JGB supply and the weekly international security flow data from the Japanese MoF provide the highlights of Friday’s domestic docket.