Futures Uptick, US Tsys Stronger After PPI & Jobless Claims

In post-Tokyo trade, JGB futures are mildly higher, closing +7 compared to settlement levels, after US tsys finished 1-6bp richer across major benchmarks with the curve flatter.

• US regional bank concerns saw US tsys unwind a brief bout of weakness after the BoE’s 25bp hike. US tsys firmed further following a lift in initial jobless claims, marking the highest level since October 2021. US PPI data was largely consistent with expectations, supporting yesterday's CPI data and indicating that inflationary pressures are subsiding.
• MNI's technical analyst reports that the JGB futures' continued appreciation indicates an extension of the present short-term bull cycle. The robust rebound from the April 18 low of 147.27 supports the view that the pullback between March 22 and April 18 was corrective in nature. Investors are now focusing on the bull trigger and the March 22 high of 149.53.
• BoJ Governor Ueda, speaking that the G7 finance ministers meeting, said he believed the US government will do its utmost to avoid the debt ceiling issue causing problems, adding that the BoJ will take appropriate steps in the worst-case scenario.
• Money stock data for Apr is the only local data today.
• The local calendar also sees 3-month bank bill supply and BoJ Rinban operations covering 1–3-year, 5-10-year, 10-25-year, and 25-year+ JGBs.