Futures Uptick At The Lunch Break, BoJ Takata Says Keep Monetary Easing

At the Tokyo lunch break JGB futures are at session highs, +3 compared to settlement levels, after spending most of the morning session in slight negative territory.

• With the local data calendar empty today, local participants have been focused on a speech by BoJ Board Member Takata. In the speech, he said that large-scale monetary easing must be kept in place amid extremely high uncertainties. Adding that it’s also necessary to take action nimbly to prepare for uncertainties by considering inflation and economic conditions. (See link). BoJ Member Nakagawa will deliver a speech tomorrow in Kochi.
• Outside the speech, local participants have likely been guided by US tsys. US tsys are dealing ~1bp richer to 1bp cheaper, pivoting at the 20s.
• The cash JGB curve has twist flattened, pivoting at the 30s, with yields 0.1bp higher to 0.9bp lower. The benchmark 10-year yield is 0.5bp higher at 0.663%, above BoJ's YCC old limit of 0.50% but below its new hard limit of 1.0%.
• The swaps curve is dealing mixed, with rates 0.3bp higher (3-year) to 1.0bp lower (30-year). Swap spreads are tighter.