In post-Tokyo trade, JGB futures closed weaker, -6 compared to settlement levels, after US tsys bear-steepened, with yields 1-4bps higher.
- Fed Chairman Powell repeated his January FOMC press conference at his Senate Banking Committee testimony yesterday.
- Focus on key US CPI inflation data today at 0830ET.
- (MNI) Bank of Japan officials have failed to reach a consensus on whether the pace of inflation will accelerate this year and when the Board will next raise the policy interest rate, with a change to how it formulates its outlook suggesting greater wage pressure, MNI understands.
- The Bank has recently placed more weight on the unemployment gap when determining the inflation outlook over the output gap, which suggests the labour market is tighter than previously thought and putting greater pressure on wages.
- Bank officials have played down the output gap when producing an inflation view due to the distorting impact of the labour shortage, shifting to a more US Federal Reserve-style focus on CPI and the unemployment rate.
- Local markets return today after yesterday’s holiday, with January money stock figures and preliminary machine tool orders data out (Jan). There is also 10-year linker supply due.