Higher At The Break, Ueda Focus Remains On Wages

At the break, JGB futures sit at 144.61, +.27, a touch below session highs (144.67). We have generally tracked higher this session, outperforming a slightly offered UST futures tone (108-01 -02+).

• Comments from BoJ Governor Ueda have continued to cross the wires (RTRS). The Governor has stated that the central bank need not wait for real wages to turn positive before exiting YCC, negative rates. He added if there is a strong chance that real wages will turn positive in the future that may be enough to warrant a policy shift.
• This slightly more hawkish bias has been tempered by further comments that the BoJ needs to confirm import price pass through is dissipating and the wage-inflation cycle is kicking off before shifting policy.
• Earlier comments noted that the central bank was still some distance from achieving its 2% inflation target, which were very much in line with the status quo.
• In the cash JGB space, yields are slightly above session lows, 10yr back at 0.866%, but we remain down for the session so far.
• FX markets haven't shown a large reaction to the recent comments, with USD/JPY a touch off session highs, last near 150.50.