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Futures Unwind Most Of Overnight Weakness After CPI Data

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In Tokyo morning trade, JGB futures are holding a downtick and are well above overnight closing levels, -1 compared to settlement levels, after today’s National CPI undershoots expectations.

  • All CPI measures printed slightly below consensus expectations. Moreover, they showed softer y/y momentum relative to Feb. Headline was 2.7% y/y (against a forecast and prior outcome of 2.8%). Ex-fresh food was 2.6% y/y (2.7% forecast and 2.8% prior). The core ex-fresh food and energy measure printed 2.9% y/y (3.0% forecast and 3.2% prior).
  • In m/m terms, 8 out of the 11 sub-components recorded a firmer pace compared with Feb. In Feb, 5 out of 11 sub-components recorded a firmer pace relative to Jan. In March, Food prices rebounded, as did utilities and clothing & footwear. Transport (-0.1% m/m) was the only negative result.
  • (Reuters) - Bank of Japan Governor Kazuo Ueda said on Thursday the central bank may raise interest rates again if the yen's declines significantly push up inflation, highlighting the impact currency moves may have on the timing of the next policy shift. (See link)
  • The cash JGB curve has slightly twist-flattened. The benchmark 10-year yield is 0.1bp lower at 0.868% versus the YTD high of 0.891% set this week.
  • Swap rates and spreads are slightly mixed.
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In Tokyo morning trade, JGB futures are holding a downtick and are well above overnight closing levels, -1 compared to settlement levels, after today’s National CPI undershoots expectations.

  • All CPI measures printed slightly below consensus expectations. Moreover, they showed softer y/y momentum relative to Feb. Headline was 2.7% y/y (against a forecast and prior outcome of 2.8%). Ex-fresh food was 2.6% y/y (2.7% forecast and 2.8% prior). The core ex-fresh food and energy measure printed 2.9% y/y (3.0% forecast and 3.2% prior).
  • In m/m terms, 8 out of the 11 sub-components recorded a firmer pace compared with Feb. In Feb, 5 out of 11 sub-components recorded a firmer pace relative to Jan. In March, Food prices rebounded, as did utilities and clothing & footwear. Transport (-0.1% m/m) was the only negative result.
  • (Reuters) - Bank of Japan Governor Kazuo Ueda said on Thursday the central bank may raise interest rates again if the yen's declines significantly push up inflation, highlighting the impact currency moves may have on the timing of the next policy shift. (See link)
  • The cash JGB curve has slightly twist-flattened. The benchmark 10-year yield is 0.1bp lower at 0.868% versus the YTD high of 0.891% set this week.
  • Swap rates and spreads are slightly mixed.