CHINA:  Bond Futures Marginally Up Despite Liquidity Injection. 

USD/JPY is little changed post the BoJ decision. We were last 149.30/35, close toend Tuesday levels in the US. Ranges today are 149.20-64. The BOJ delivered no change as widely expected, with yen briefly strengthening as BoJ headlines crossed that the virtuous cycle of wages and prices was intensifying, but there was no follow through.

• Focus now shifts to Ueda' press conference later (3:30pm local time). Focus will be on next hike timing, which today's meeting left the door firmly ajar, albeit highlighting large economic uncertainties around the outlook. Current market pricing doesn't have another full rate hike priced in until around the Oct meeting, later this year.
• Attention will then turn to the Fed. US-JP yield differentials have stabilized around Sep lows from last year, the 10yr spread last close to +278bps, the 2yr spread near +322bps. Directionally this stability is not providing further downside impetus to USD/JPY like it was in late Feb/early March.
• Note this Friday we get National CPI data, the market expects headline and core ex fresh food to soften, but the measure which excludes energy is expected to edge up to 2.6%y/y (Jan's read was 2.5%).
• For USD/JPY technicals, upside focus is at the following levels: 
  RES 2: 151.30/36 High Mar 3 / 50-day EMA 
• RES 1: 150.18 High Mar 5 
• Downside focus rests at:
• SUP 1: 147.45/146.54 Low Mar 14 / 11 and the bear trigger  
• SUP 2: 145.40 2.0% 10-dma envelope. 

In early Tokyo afternoon trading, JGB futures are weaker and at session lows, -14 compared to the settlement levels, after the BoJ Policy Decision announcement.

• The BoJ left rates unchanged at 0.50%, as widely expected by sell-side economists and financial market pricing. The decision was unanimous, with a 9-0 vote.
• The central bank announcement came earlier than recent policy announcements, suggesting it didn't take long to build a consensus around today's decision (or there wasn't a strong debate to shift policy setting at this meeting).
• The BoJ left the door clearly ajar for further policy adjustments. It stated that price trends are likely to move in line with its 2% goal in the second half. In particular, the central bank noted that the virtuous cycle of wages and prices was intensifying. This in turn should keep output above potential.
• Still, it noted high uncertainties in terms of the outlook for economic activity and prices.
• Cash US tsys are ~1bp cheaper in today’s Asia-Pac session ahead of today’s FOMC policy decision.
• Cash JGBs are flat to 1bp cheaper across benchmarks. The benchmark 10-year yield is 0.9bp higher at 1.516% versus the cycle high of 1.58%.
• Swap rates are 1-2bps higher. Swap spreads are wider.

Q4 GDP prints on Thursday and Bloomberg consensus is forecasting the production-based measure to rise 0.4% q/q but still be down 1.4% y/y after falling 1.0% q/q & 1.5% y/y the previous quarter. The RBNZ’s February projection is slightly lower at 0.3% q/q but the annual rate is in line with consensus. With the economy developing broadly in line as it expects, it is likely to cut rates 25bp at each of the April and May meetings.

• Forecasts are in a wide range between +0.2% q/q and +1.3% q/q but most are around 0.3-0.5% q/q.
• ANZ is in line with consensus and ASB & Kiwibank with the RBNZ. BNZ is less optimistic forecasting a rise of 0.2% q/q resulting in an annual decline of 1.5%. Westpac is more optimistic projecting a 0.5% q/q increase and a 1.3% y/y fall, but this is due to seasonal adjustment and its other calculations imply that there was no sectoral growth in Q4.
• Expenditure-based GDP fell 0.8% q/q and 1.1% y/y in Q3 and the RBNZ expects it to rise only 0.2% q/q in Q4 to be down 0.9% y/y.
• Q4 data showed a solid rise in manufacturing volumes (+1.1% q/q) and real retail sales (+0.9% q/q). Building volumes were very weak contracting 4.4% q/q as the construction sector continues to struggle. There could be a positive contribution from net exports though as export volumes rose 1.3% q/q and imports fell 1.7% q/q.