Futures Weaker Overnight On Friday As Haven Demand Wanes

In post-Tokyo trade on Friday, JGB futures were weaker, closing -22 compared to settlement levels, after US tsys pared strength instigated by Israel’s attack on Iran by the end of trading on Friday. This occurred after Tehran appeared to play down retaliation.

• That left US tsys to focus on ongoing strength in US economic data and the potential for rate cuts to be pushed further out this year. The Fed entered its media Blackout regarding policy on Friday.
• Cash US tsys finished flat to 2bps richer, with the 10-year yield at 4.62%.
• US equity markets were mostly weaker on Friday led by the Nasdaq, which declined around 2%. The recent AI hi-flyer, Nvidia, was the big loser, dropping 10%.
• Today, the local calendar is relatively light, with Jibun Bank PMIs as the only release. The week's focus, however, is the BoJ Policy Decision on Friday.
• No policy adjustment is anticipated at the two-day meeting ending on April 26, following last month's decision to raise rates for the first time since 2007.
• However, a growing number of economists foresee the possibility of the BoJ implementing another rate hike in October, with many highlighting July as a potential earlier timeframe. The prospect of a weaker yen is cited among the factors that could accelerate this timeline.