Futures Weaker As BOJ Inflation Projection Fears & US Tsys Weigh

In post-Tokyo trade, JGB futures are sharply lower, closing -35 compared to settlement levels.

• JGB futures breached 145.00 as BBG sources reported that “the BOJ is likely to discuss raising its inflation projection for fiscal year 2023 and 2024 at its policy meeting later this month, extending the period in which it sees prices hitting or exceeding its 2% goal.” This built on last week’s narrative from Kyodo News sources, which suggested that “the BOJ is considering raising its inflation outlook for the current business year to next March to near 3%.”
• The weakness in JGB futures was consolidated after US tsys finished the NY session 8-15bps cheaper after another batch of firm data. Retail sales were strong, with the ex-auto and gas measure rising by 0.6% m/m in September, above the 0.1% expected. Later, the strength of domestic data was reinforced by an upward revision to the Atlanta Fed’s GDPNow to 5.4% annualised for Q3.
• There was also further US political uncertainty after Jim Jordan failed to secure the speaker's gavel in a first roll call in the House.
• Today, the local calendar is light, with Tokyo Condominiums for Sale as the only release.
• Elsewhere, September's Monthly Economic Activity from China provides the highlight in Asia.