Futures Weaker Overnight, Cash US Tsys Closed For 4th Of July

In post-Tokyo trade, JGB futures are cheaper, closing -7 compared to settlement levels at 148.66, with cash US tsys closed for observance of the 4^th of July holiday. Tsy futures were little changed with TYU3 finding support at 111-25+, the low from June 30 before firming through the NY session to pare losses.

• According to MNI’s technical team, JGB futures continue to operate above support at 147.34, the May 26 low. The contract has breached 148.41, the May 12 high. This strengthens a bullish case and signals scope for a climb towards the next key resistance at 149.21/53, highs from May and March. Clearance of these levels would highlight an important break. To the downside, a breach of 147.34 would signal a stronger reversal and open 146.11, the Feb 22 low.
• According to Bloomberg, BoJ watchers are mostly convinced monetary easing will continue as Ueda has pledged. The lingering question is whether he will get rid of or adjust the bank’s control of yields as a stop-gap measure to reduce the side effects of stimulus before a larger move later on. A third of economists see him doing that in July when the bank is widely expected to raise its price forecasts. (See link)
• Today the final June Jibun Bank composite and services PMIs print along with BoJ Rinban operations covering 1-5-year and 10-25-year JGBs.