Futures Weaker At Lunch But Off Lows

At the Tokyo lunch break, JGB futures are weaker but off session lows, -20 compared to the settlement levels.

• Outside of the previously outlined Trade Balance data, there hasn't been much in the way of domestic drivers to flag.
• (Bloomberg) -- The Bank of Japan is unlikely to raise interest rates this month and will instead cut its bond-buying a little more than expected to avoid any fuelling of yen weakness, according to a former executive director.
• “I don’t think there’s a chance of a rate hike in July,” Hideo Hayakawa said in an interview Wednesday. “It’s hard to confirm from recent data that the economy is definitely progressing in line with BOJ expectations.” (See link)
• Impact of data
• Cash US tsys are 1-2bps cheaper in today’s Asia-Pac session after yesterday’s modest bear flattener.
• Cash JGBs are 2-3bps cheaper out to the 30-year and little changed beyond. The benchmark 10-year yield is 1.6bps higher at 1.057% versus the cycle high of 1.108%.
• The swaps curve has bear-steepened, with rates 1-3bps higher. Swap spreads are wider.
• 5-year Climate Transition supply is due.