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JGBS: Futures Weaker But Off Worst levels As BOJ Nakamura Leans Dovish

JGBS

JGB futures are weaker, -5 compared to settlement levels, but off the session’s worst levels. 

  • BOJ board member Nakamura stated that he is personally not confident about the sustainability of wage growth, while also noting inflation is at risk of missing the 2% target from fiscal 2025 onwards (per RTRS).
  • Nakamura also stated that his growth forecast is below the board median due to a chance consumers may hold off spending and capex could be delayed. Further adjustments to easy policy settings should be done gradually, Nakamura stated.
  • While it is known that Nakamura leans dovish, the short-end JGBs managed to slightly richen after his remarks.
  • Cash US tsys are ~1bp cheaper in today’s Asia-Pac session. Today's US calendar will see Challenger Job Cuts, Trade Balance and Jobless Claims data. Fed's Barkin will also speak on the economic outlook.
  • Cash JGBs are flat to 1bp richer across benchmarks beyond the 1-year and out to the 30-year. The benchmark 30-year yield is 0.2bp higher at 2.292% after today’s auction delivered solid results.
  • Swap rates are 1-2bps lower out to the 10-year and 2-5bps higher beyond. Swap spreads are tighter out to the 7-year and wider beyond.
  • Tomorrow, the local calendar will see Cash Earnings, Household Spending, and the Coincident and Leading Indices.
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JGB futures are weaker, -5 compared to settlement levels, but off the session’s worst levels. 

  • BOJ board member Nakamura stated that he is personally not confident about the sustainability of wage growth, while also noting inflation is at risk of missing the 2% target from fiscal 2025 onwards (per RTRS).
  • Nakamura also stated that his growth forecast is below the board median due to a chance consumers may hold off spending and capex could be delayed. Further adjustments to easy policy settings should be done gradually, Nakamura stated.
  • While it is known that Nakamura leans dovish, the short-end JGBs managed to slightly richen after his remarks.
  • Cash US tsys are ~1bp cheaper in today’s Asia-Pac session. Today's US calendar will see Challenger Job Cuts, Trade Balance and Jobless Claims data. Fed's Barkin will also speak on the economic outlook.
  • Cash JGBs are flat to 1bp richer across benchmarks beyond the 1-year and out to the 30-year. The benchmark 30-year yield is 0.2bp higher at 2.292% after today’s auction delivered solid results.
  • Swap rates are 1-2bps lower out to the 10-year and 2-5bps higher beyond. Swap spreads are tighter out to the 7-year and wider beyond.
  • Tomorrow, the local calendar will see Cash Earnings, Household Spending, and the Coincident and Leading Indices.