USDJPY TECHS: Bear Threat Remains Present

•  China set its economic growth goal at about 5% for 2025, raising expectations for officials to unleash more stimulus as they confront a trade war with the US. (source: BBG).
• China raised its general budget deficit to the highest level in more than three decades, as Beijing ramps up spending to counter the effects of rising US tariffs.   The government set this year’s fiscal deficit target to 5.66 trillion yuan ($780 billion), or around 4% of gross domestic product, according to the annual work report Premier Li Qiang delivered to the national parliament on Wednesday. (source: BBG)
• Strong day for most indexes with Hang Seng leading up +1.78%, CSI 300 +0.17%, Shanghai Comp +0.15% whilst Shenzhen fell -0.40%
• CNY: Yuan Reference Rate at 7.1714 Per USD; Estimate 7.2635
• Bonds: despite suggestions of higher issuance, bonds hardly moved today with the CGB 10YR 1.75%

• The record Treasury futures trade appears to have been an unwinding of a long position in the TYM5 contract, as open interest in the contract dropped. The Tsys block trade saw a seller offload 78,000 TYH4 futures in early London trading, with a DV01 $5.1m.
• Simultaneously, S&P 500 futures surged 2.29%, while volume also increased as Treasuries sold off. Leading into Tuesday’s US session, bond contracts had been rising alongside open interest before an abrupt decline began when equities were at intraday lows, as per BBG

Chart. TYM5 Sells Off As S&P Futures Rally

JGB futures are weaker, -17 compared to settlement levels, but off session cheaps.

• “The Bank of Japan continues to look for opportunities to raise interest rates further, but is unlikely to rush into doing so, as underlying inflation has yet to reach the central bank's target of 2%, according to one of its two deputy governors.” (per DJ via BBG)
• “Bank of Japan Governor Kazuo Ueda called for global cooperation on Wednesday, saying geopolitical tension could impact financial stability such as by causing sudden reversals of cross-border capital flows. "Looking ahead, the resilience of Asian emerging market economies will be tested by rising geopolitical tension in several ways," Ueda told a seminar hosted by the International Monetary Fund in Tokyo.” (per RTRS)
• Cash US tsys have twist-steepened, with yields 4bps lower to 1bp higher, in today’s Asia-Pac session after yesterday’s heavy session.
• The cash JGB curve has bear-steepened, with benchmark yields flat to 4bps cheaper. The benchmark 10-year yield is 2.1bps higher at 1.445 % versus the cycle high of 1.466%.
• The swaps curve has also bear-steepened, with rates flat to 4bps higher. Swap spreads are mostly wider.
• Tomorrow, the local calendar will see International Investment Flow and Tokyo Avg Office Vacancies data alongside 30-year supply.