Futures Weaker In Overnight Trade Ahead Of Weekend

In post-Tokyo trade, JGB futures cheapened in overnight trade ahead of the weekend, closing -26 compared to settlement levels, despite US tsys finishing 3-6bps richer on Friday across the major benchmarks with the curve steeper.

• US tsys firmed through Friday's European session, erasing Asia's post-BOJ losses, before briefly extending gains as the Q2 Employment Cost Index printed a touch softer than expected. However, the move didn't follow through. US tsys observed narrow ranges for the remainder of Friday's trade.
• BoJ Governor Ueda stressed that Friday's shift on YCC, allowing the 10yr government bond yield to trade as high as 1.00%, albeit with a long-term target still at 0%, wasn't a shift away from easy policy settings. “The BOJ is still some distance away from removing its negative short-term policy interest rate,” Ueda told reporters on Friday after the two-day meeting. “Sustainable and stable achievement of the price stability target of 2%, accompanied by wage increases, has not yet come in sight.”
• The 10-year JGB yield finished Friday slightly below session highs (0.568%), while US-JP 10yr swap spreads slumped by ~15bps but remain above recent lows.
• Today on the data front we have June Retail Sales and IP growth, later on Housing Starts and Consumer Confidence are due.