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Slightly Mixed After Services PPI Data, BoJ Rinban Operations Today

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In Tokyo morning trade, JGB futures are slightly stronger, +3 compared to settlement levels.

  • March Services PPI rose 2.3% y/y versus expectations of 2.1% and a revised prior of 2.2%.
  • The recent sell-off extended to touch 144.08 before bouncing into the close of last week. According to MNI’s technical team, a stronger reversal higher is required to signal the end of the recent corrective phase. The bull trigger has been defined at 147.74, the mid-January high. A break would resume the uptrend.
  • Moving average studies remain in a bull-mode set-up, highlighting an uptrend. For bears, a resumption of weakness would potentially open the 144.60 support.
  • (MNI) Japan’s government left its economic assessment for the third straight month and also maintained its view on major economic components, such as private consumption, exports and industrial production, the Cabinet Office said on Tuesday. The government repeated that private consumption appears to have paused on the back of high prices. (See link)
  • Cash JGBs are slightly mixed, with yield movements bounded by +/- 1bp. The benchmark 10-year yield is 0.7bp lower at 0.882% versus the YTD high of 0.891%.
  • The swaps curve has twist-steepened, pivoting at the 20s, with rates -2bp to +2bp. Swap spreads are tighter out to the 10-year and wider beyond.
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In Tokyo morning trade, JGB futures are slightly stronger, +3 compared to settlement levels.

  • March Services PPI rose 2.3% y/y versus expectations of 2.1% and a revised prior of 2.2%.
  • The recent sell-off extended to touch 144.08 before bouncing into the close of last week. According to MNI’s technical team, a stronger reversal higher is required to signal the end of the recent corrective phase. The bull trigger has been defined at 147.74, the mid-January high. A break would resume the uptrend.
  • Moving average studies remain in a bull-mode set-up, highlighting an uptrend. For bears, a resumption of weakness would potentially open the 144.60 support.
  • (MNI) Japan’s government left its economic assessment for the third straight month and also maintained its view on major economic components, such as private consumption, exports and industrial production, the Cabinet Office said on Tuesday. The government repeated that private consumption appears to have paused on the back of high prices. (See link)
  • Cash JGBs are slightly mixed, with yield movements bounded by +/- 1bp. The benchmark 10-year yield is 0.7bp lower at 0.882% versus the YTD high of 0.891%.
  • The swaps curve has twist-steepened, pivoting at the 20s, with rates -2bp to +2bp. Swap spreads are tighter out to the 10-year and wider beyond.