Richer With US Tsys, BoJ Gov. Ueda Stays On Message

Following the Tokyo trading session, JGBs exhibited strength, closing +18 compared to settlement levels. This aligned with richer US tsys, which finished the NY session at or near the day's highest levels. Additionally, there was some anticipation of month- and quarter-end demand, leading to front-running in the market. Rebalancing flows also came into play due to the superior performance of equities compared to US tsys during the quarter.

• During the ECB's annual conference in Portugal, the heads of the Fed, ECB, BoE, and BoJ delivered speeches, but no new perspectives were shared. They echoed the recent policy updates, with the Fed, ECB, and BoE emphasising the importance of tightening policies to address inflationary concerns, while the BoJ maintained its dovish stance.
• Bloomberg reports that BoJ Governor Ueda offered no succor for remaining yen bulls at the European Central Bank’s conference in Sintra, Portugal on Wednesday. The Bank of Japan may change its policy this year, he said, but only once it has greater certainty about inflation forecasts for next year. (See link)
• The local calendar sees Retail Sales (May), International Investment Flows (June 23) and Consumer Confidence (June).
• The MoF also plans to sell Y2.9tn 2-year JGBs.