Futures Weaker After US Bear-Flattened, US Retail Sales Stronger Than Expected

In post-Tokyo trade, JGB futures are weaker, closing -10 compared to settlement levels, after US tsys bear-flattened, with yields 2-14bps higher, following stronger than expected US Retail Sales in December (0.55% m/m vs. cons 0.4% after a marginally upward revised 0.35% m/m vs. initial 0.28%). The control group, which feeds into GDP, was the clear standout, jumping 0.76% m/m (cons 0.2%) after a slightly upward revised 0.47% (initial 0.40%).

• Industrial Production also fared slightly better than expected in December, rising 0.05% m/m (cons -0.1%) but the beat was offset by a downward revised 0.0% m/m (initial 0.2%) in November.
• A poor 20-year auction added to the weakening in US tsys.
• There is next to zero chance the BoJ will change its yield-curve control and negative short-term rate policy at its Jan. 22-23 meeting, according to Bloomberg Economics (See link)
• The local data calendar today has weekly investment flow data, along with core machine orders and then later on IP/capacity utilization prints. These outcomes are for November.
• The MoF also plans to sell Y1.0tn 20-year JGBs today.