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Little Changed, Gov Ueda Comments On Challenges For the BoJ

JGBS

In Tokyo morning trade, JGB futures are holding stronger, +4 compared to settlement levels, after BoJ Governor Ueda said at the BoJ-IMES conference that:

  • “We have made progress in moving away from zero and lifting inflation expectations, but we must now re-anchor them, this time at the 2% target.”
  • “While many of the challenges we face are similar to those encountered by our counterparts, some are uniquely difficult for us.”
  • “Assessing natural interest rate is particularly difficult in Japan, given a prolonged period of near-zero short-term interest rates over past three decades.”
  • “The absence of significant interest rate movements poses a considerable obstacle in assessing the economy's response to changes in interest rates.”
  • The US market is closed for the Memorial Day holiday today.
  • Cash JGBs are little changed, with yield movements bounded by +/- 0.5bp. The benchmark 10-year yield is 0.5bp higher at 1.01%, just shy of its YTD high of 1.011%.
  • Swaps are slightly richer apart from the 20-year, which is 2bps cheaper. Swap spreads are mixed.
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In Tokyo morning trade, JGB futures are holding stronger, +4 compared to settlement levels, after BoJ Governor Ueda said at the BoJ-IMES conference that:

  • “We have made progress in moving away from zero and lifting inflation expectations, but we must now re-anchor them, this time at the 2% target.”
  • “While many of the challenges we face are similar to those encountered by our counterparts, some are uniquely difficult for us.”
  • “Assessing natural interest rate is particularly difficult in Japan, given a prolonged period of near-zero short-term interest rates over past three decades.”
  • “The absence of significant interest rate movements poses a considerable obstacle in assessing the economy's response to changes in interest rates.”
  • The US market is closed for the Memorial Day holiday today.
  • Cash JGBs are little changed, with yield movements bounded by +/- 0.5bp. The benchmark 10-year yield is 0.5bp higher at 1.01%, just shy of its YTD high of 1.011%.
  • Swaps are slightly richer apart from the 20-year, which is 2bps cheaper. Swap spreads are mixed.