Futures Weaker In Post-Tokyo Trade Ahead Of Weekend

In post-Tokyo trade, JGB futures are weaker, closing -13 compared to settlement levels, after US tsys finished ahead of the weekend 5-9bp cheaper across benchmarks. UofM’s confidence fell but 5-10 years inflation expectations rose to a 12-year high of 3.2%. FOMC dated OIS closed with a terminal rate of 5.10% and 72bp of cuts priced by year-end.

• MNI's technical analyst reports that the JGB futures' continued appreciation indicates an extension of the present short-term bull cycle. Investors are now focusing on the bull trigger and the March 22 high of 149.53.
• Local newswires reported over the weekend that PM Kishida will ask the government and BoJ to examine the sustainability of wage increases (see this link for more details).
• Japan may also allow electricity price hikes in June. Reported rises of 17% to 43% are expected, although companies may be asked to scale back the size of the increase (see this link for more details). A cabinet meeting this week will reportedly discuss the matter.
• The local calendar is scheduled to release PPI data for April today, ahead of Q1 GDP (preliminary) on Wednesday. The market consensus for PPI is flat in m/m terms, which would see the y/y pace slip to 5.6%, versus 7.2% prior.
• 5-year JGB supply is also slated for today.