Kuroda Stresses Need For Continued Easing While Successor Timeline Starts To Fall Into Place

JGB futures tracked wider core global fixed income this morning, ticking lower, before correcting from worst levels, -13 at the break, operating comfortably within the recently observed range. Cash JGBs run 1bp richer to 2bp cheaper, with the curve twist steepening and 10s bumping up near the upper limit of the BoJ’s permitted YCC trading band. Swap rates are firmer across the curve, with steepening observed there, while swap spreads are mixed.

• Domestic headline flow has seen BoJ Governor Kuroda reaffirm the need for continued easing.
• Elsewhere, parliamentary officials have confirmed that the government will announce its nominations for the BoJ Governor position on 14 February, at 11:00 Tokyo time (02:00 London), with the parliamentary hearings slated for 24 February.
• Finance Minister Suzuki has recently stressed that it is too soon to discuss a potential revision to the BoJ-government accord (after recent months saw press speculation that the wording surrounding the inflation target will become a little more variable), pointing to such discussions taking place with Kuroda’s successor.
• A reminder that current BoJ Deputy Governor (and favourite to succeed Kuroda) Amamiya will appear in front of parliament this afternoon.
• Japanese PPI data was a touch softer than expected in January, although the Y/Y metric remained notably elevated at +9.5%, while the miss vs. expectations was aided by an upward revision to the December prints.