JGBS: Cash Bonds Little Changed, Light Local Calendar

Asian equities on opening higher today, with the MSCI Asia Pacific Index gaining 0.4%, driven by tech and shipbuilding stocks in South Korea and materials shares in Australia. The CSI 300 Index is expected to extend its rebound, supported by stronger-than-expected Chinese M1 money growth and the continuation of a "moderately loose" monetary policy. US-listed Chinese shares gained over 2%, aided by positive tariff policy developments. 

• Japanese equities are higher today after four consecutive sessions of losses, supported by a weaker yen benefiting export-focused sectors like automakers and machinery firms. The Topix is 0.6% higher while the Nikkei trades just 0.15% higher. Keyence led gains on the Topix, rising 4.4%, with banks and insurers also advancing. Semiconductor-related stocks saw renewed buying after recent sell-offs tied to concerns over rising interest rates and regulatory issues.
• Later today Bank Indonesia is expected to maintain its key interest rate at 6% amid ongoing efforts to stabilize the rupiah. Rate cuts, initially expected earlier, are now likely delayed until the second half of 2025.
• Eurozone Industrial production data is due out later today before focus turns to the US inflation report, adding another layer of focus on global growth and central bank policies. 

Early G10 FX trends are skewed modestly in favor of the USD, but aggregate moves are modest. The USD BBDXY index is little changed, last near 1314.2. 

• AUD and GBP are off a little over 0.10% at this stage, but both currencies remain within recent ranges. AUD/USD was last 0.6180/855, GBP near 1.2200. EUR/USD is hovering close to 1.0300. USD/JPY is little changed, hovering near 158.00.
• In the cross asset space, US equity futures are up a touch, while regional equity markets, which are open, are mostly tracking higher. US yields sit down a touch, but looses are not much beyond 1bps at this stage.
• NZD/USD is back to 0.5600, down slightly for the session. Onshore yields continue to push higher, extending yesterday's recovery. Earlier data from the Westpac/McDermott Miller employment confidence index highlighted: "Employment confidence picked up by 2.4 points to 91.6 in the December quarter, led by an improvement in perceptions of job availability."
• There is little in the way of further data outcomes/risks events for Asia Pac markets. Focus is firmly on the upcoming US CPI print. 

In Tokyo morning trade, JGB futures are stronger, +9 compared to settlement levels.

• M2 & M3 Money Stock 1.3% y/y and 0.8% y/y respectively in December. Today, the local calendar will also see Machine Tool Orders data alongside BoJ Rinban Operations covering 1-10-year and 25-year+ JGBs.
• Cash US tsys are flat to 1bp richer in today’s Asia-Pac session. Focus turns to today’s CPI inflation data for December where rental inflation is expected to accelerate to an average figure that firmly rounds to 0.3% M/M in December.
• BoJ Deputy Governor Himino’s speech on Tuesday is another sign that the policy board’s balance is now tilting toward another 25bp rate hike when they meet on Jan. 23-24.
• Himino shared his views on two factors – the momentum of domestic wage growth and US President-elect Donald Trump’s policies. In December, Governor Kazuo Ueda flagged these as key to watch before the BoJ moves toward another rate hike. (per BBG)
• Cash JGBs are mixed across benchmarks, but the swings are bounded by +/- 1bp. The benchmark 10-year yield is 0.7bp lower at 1.24% after making a fresh cycle high of 1.245% today.
• The swaps curve has twist-steepened, pivoting at the 20-year, with rates 2bps lower to 3bps higher.