JPY: Japan's Top FX Diplomat - Closely Watching FX

JGB futures mostly held a softer bias through Monday trade, but recent lows held. We track around 129.93, +.02 versus settlement levels. Recent lows at 129.82 (from Mar 27), are the firm focus point on the downside. We remain well under the 50-day EMA, last near 131.60. JGB futures look to be underperforming some of slight uptick in US Tsy futures. Yesterday, cash JGB yields were firmed led by the back end. Note we have a 30yr debt auction today. 

• The 10yr cash JGB yield got to fresh cycle highs of 2.42% yesterday, up close to 4bps. 20-40yr tenors saw larger yield rises, the 40yr up 8bps to 3.96%. This is still under late March highs around 4.04%.
• The 2/30s curve re-steepened to 236bps. The 2yr outright yield edged closer to 1.40%.
• On the data front we just had Feb household spending, which was weaker than expected at -1.8%y/y, versus -0.8% actual and -1.0% prior. This comes despite solid wages growth at the start of the year
• Later on we have the 30yr auction, which comes after last week's fairly poor 10yr outcome.
• FInMin Katayama noted earlier: "JAPAN FINMIN KATAYAMA: HAVEN'T ESTIMATED HOW MUCH IT WOULD COST TO CONTINUE SUBSIDIES TO KEEP GASOLINE PRICES IN CHECK" - RTRS, "JAPAN FINMIN KATAYAMA: NO ISSUES IN TERMS OF AMOUNT OF OIL STOCK, QUESTION IS WHETHER WE COULD SUPPORT SOUTHEAST ASIA PARTNERS - [RTRS]"

• Gold traded in a relatively tight range in the US Monday, ultimately finishing the session down -0.57% at US$4,648.
• Earlier gold had reached a high of $4,706 before falling away into the close as profit takers stepped in. It has opened the Asia trading day marginally firmer, currently near $4,658 / 4,659.
• Reports of a Pakistan-brokered 45-day truce proposal initially provided relief seeing gold to bounce off its prior intraday lows.
• A resilient US labor market (following Friday's jobs report) and sticky inflation concerns have fueled expectations that the Federal Reserve will keep interest rates restrictive/ on hold for the near term, taking away one of gold's key catalyst to rally.
• From a technical perspective, gold remains wedged between the 100-day EMA of $4,628 and the 50-day EMA of $4,783 looking for a catalyst to break out, with the Trump deadline the next line in the sand for markets. 

• Gold traded in a relatively tight range in the US Monday, ultimately finishing the session down -0.57% at US$4,648.
• Earlier gold had reached a high of $4,706 before falling away into the close as profit takers stepped in. It has opened the Asia trading day marginally firmer, currently near $4,658 / 4,659.
• Reports of a Pakistan-brokered 45-day truce proposal initially provided relief seeing gold to bounce off its prior intraday lows.
• A resilient US labor market (following Friday's jobs report) and sticky inflation concerns have fueled expectations that the Federal Reserve will keep interest rates restrictive/ on hold for the near term, taking away one of gold's key catalyst to rally.
• From a technical perspective, gold remains wedged between the 100-day EMA of $4,628 and the 50-day EMA of $4,783 looking for a catalyst to break out, with the Trump deadline the next line in the sand for markets.