Off Rinban-Inspired Lows, Looking Through Ueda’s Comments

JGB futures stabilise away from post-Tokyo lows, with the initial round of after-hours weakness, facilitated by tweaks to the BoJ’s Q124 Rinban plan (see earlier bullets for details), moderating. The contract prints -10, around the middle of its 22-tick post-Tokyo range, with the bid in European/UK paper helping the recovery from lows.

• Relatively recent newswire headlines have covered comments from BoJ Governor Ueda, provided in an interview with NHK. Ultimately, Ueda’s remarks had little impact on JGB futures as he continued to play down the odds of a policy move at the Bank’s Jan ’24 meeting. He also stressed that the Bank is in no rush re: policy normalisation given perceptions of low risk re: a meaningful, sustained overshoot vs. the Bank’s inflation target.
• Ueda noted that the probability of an end of the Bank’s negative interest rate policy during ’24 is above 0.
• Elsewhere, Ueda focused on the need to promote a virtuous cycle between wages and inflation, as the Bank looks to attain its inflation target on a sustainable basis. Company profits will also factor into the related discussions.
• Ueda also remained open to the idea of maintaining some of the current monetary policy framework when asked about future policy changes.