Futures Supported On Dips As US Tsy's Rally, Ueda Wants To Scale Back Bond Purchases Eventually

JGB futures went lower post the lunch time break, getting to 145.29, but from there we rebounded and last track near 145.42, +.01. This is close to where we started the session.

• Some modest downside pressure may have been evident from comments by BoJ Governor Ueda, who appeared before parliament. The Governor stating that the central bank will eventually scale back its bond purchases (long end rates should ultimately be determined by the market). This is unlikely to be in the near term as Ueda stated the central bank will assess the market reaction to the recent policy shift.
• Still, the continued push higher in US Tsy futures, last at 110-18, +05+ for the 10yr future, has likely had some positive spill over to the JGB futures space. Broader risk aversion in the equity space has likely helped this move.
• In terms of JGB yields, the 2yr has hit multi decade highs above 0.205%. Most other parts of the curve are firmer in yield terms, although more so at the front end. The 10yr JGB yield was last up a touch to 0.745%.
• In the swap space, the 10yr was last around 0.88%, little changed for the session.
• Earlier data showed national CPI a touch below expectations, but y/y headline momentum still rebounded from Jan levels (to 2.8% from 2.2%). Core CPI, ex fresh food and energy, continued to moderate to 3.2% y/y.