Will The BoJ Act?

The wider cheapening in core global FI markets allowed JGB futures to register another fresh cycle low in the overnight session, with the contract going out off of worst levels, -8 vs. settlement.

• Participants are on the lookout for BoJ action, with 10-Year JGB yields finishing Thursday trade at 0.23% (the level that triggered BoJ fixed rate operations back in Feb, in what was a pre-emptive move to protect the upper end of the Bank’s -/+0.25% permitted 10-Year JGB yield trading range), with subsequent weakness seen in core global FI markets.
• Elsewhere, Tokyo CPI data for March has already crossed, providing marginal (0.1ppt) upside surprises across the board, although the core measure sits at a very limited +0.8% Y/Y terms this was the highest such print observed since Dec ’19.
• Looking ahead, Japanese Services PPI data is due to be released shortly, while BoJ Governor Kuroda will make another appearance in the Diet (10:40 Tokyo/02:40 London).