IRAN: Iran, Pakistan Leaders Discuss Diplomatic Efforts To End War

JGB futures are little changed, -3 compared to settlement levels.

• The BOJ held the policy rate at 0.75%, as widely expected, while maintaining a tightening bias. The board vote was 6-3 in favour of holding rates at 0.75%, which compares to an 8-1 vote to hold rates steady at the March policy meeting. In this sense, today's hold can be seen as marginally hawkish, given more votes to hike the policy rate compared to the last meeting.
• We wait to hear from BoJ Governor Ueda later on at 3:30pm local time.
• In terms of forecast shifts, not surprisingly we saw inflation raised for both core CPI and core, ex energy. For the 2026 financial year the core CPI forecast was raised to 2.8% from 1.9% prior, for the ex-energy measure it was raised to 2.6% from 2.2%.
• On growth, the current GDP financial year forecast was cut to 0.5% from 1.0% prior. For the next financial year it was nudged down to 0.7% (0.8% was the prior forecast).
• Cash JGBs have twist-flattened across benchmarks following the BOJ decision, with yields 1bp higher to 3bps lower.
• Tomorrow, the local calendar will see Retail Sales, Housing Starts, IP and Consumer Confidence data alongside 2-year supply.