JGBS: Little Changed After Natl CPI Release
In Tokyo morning trade, JGB futures are slightly higher, +3 compared to settlement levels, after reversing overnight weakness post-CPI.
- Japan July nationwide CPI was close to market expectations. Headline printed at 3.1%y/y, in line with market forecasts, while prior was 3.3%. The ex fresh food measure was slightly above expectations at 3.1% (3.0% was forecast and June printed at 3.3%). The ex fresh food, energy core measure was steady at 3.4%y/y, in line with the consensus estimate (3.4% was also the June outcome).
- Headline is now comfortably off 2025 highs (3.7%), but core measures are seeing less downside momentum in recent months.
- Still, the core measure which excludes all food and energy was steady at 1.6%y/y, which is where we have been on this metric since March of this year.
- Cash US tsys are slightly richer in today’s Asia-Pac session after yesterday’s sell-off.
- Federal Reserve Chair Jerome Powell will deliver opening remarks at the Kansas City Fed's annual Jackson Hole symposium Friday at 10 a.m. ET, and Andrew Bailey, Christine Lagarde and Kazuo Ueda, leaders of the Bank of England, ECB and Bank of Japan, respectively, will discuss labour market transition on a panel Saturday at 12:25 p.m. ET.
- Cash JGBs are little changed across benchmarks.
- Swap rates are ~1bp lower.
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