JGBS: Richer, BoJ Uchida: Tariffs Will Have Up & Dn Impacts On Japan CPI

House Speaker Mike Johnson (R-LA) is shortly due to gavel in a joint session of Congress ahead of US President Donald Trump's address, scheduled to get underway in roughly an hour. LIVESTREAM

• The address isn’t technically a ‘State of the Union’ but will offer Trump an opportunity to tout the successes of his administration to the largest television audience since his return to office. Trump pledged on Truth Social that his address "WILL BE BIG" and he will “TELL IT LIKE IT IS”.
• Fox News reports that Trump’s speech will cover four areas: His second term's achievements so far at home and abroad, the economy, a push for Congress to pass border funding, and Trump's plans for "peace around the globe."
• Politico reports: “GOP lawmakers widely agreed they’d like the president to focus on the economy, immigration and continuing peace talks with Ukraine. But they don’t expect him to shy away from talking about Musk’s federal government cuts, either.”
• Trump indicated that he may address his public spat with Ukrainian President Volodymyr Zelenskyy. He told reporters yesterday, when asked if a mineral-sharing deal with Kyiv is still on the table: “I’ll let you know. We’re making a speech, you probably heard.”
• Senator Elissa Slotkin (D-MI) will deliver the Democratic response to Trump’s address at 21:30 ET 02:30 GMT.
• Axios reports that Democratic lawmakers are discussing a “litany of options” to protest Trump’s address, “including through outright disruption”. 

Taiwan continues to see heavy outflows taking the past 5 sessions to almost $5b in outflows, India also continues to see heavy outflows.

• South Korea: Recorded +$11m in inflows Tuesday, bringing the 5-day total to -$1.78b. YTD flows remain negative at -$3.94b. The 5-day average is -$356m, worse than the 20-day average of -$129m and the 100-day average of -$119m.
• Taiwan: Recorded -$1.34b in outflows Tuesday, bringing the 5-day total to -$4.98b. YTD flows remain negative at -$7.59b. The 5-day average is -$996m, significantly worse than the 20-day average of -$214m and the 100-day average of -$147m.
• India: Posted -$534m in outflows Monday, bringing the 5-day total to -$2.77b. YTD outflows remain heavy at -$14.31b. The 5-day average is -$553m, worse than the 20-day average of -$294m and the 100-day average of -$225m.
• Indonesia: Recorded +$36m in inflows Tuesday, bringing the 5-day total to -$281m. YTD flows remain negative at -$1.31b. The 5-day average is -$56m, slightly worse than the 20-day average of -$53m and the 100-day average of -$33m.
• Thailand: Saw -$26m in outflows Tuesday, bringing the 5-day total to -$230m. YTD flows remain negative at -$597m. The 5-day average is -$46m, worse than the 20-day average of -$13m, and the 100-day average of -$18m.
• Malaysia: Posted -$42m in outflows Tuesday, bringing the 5-day total to -$225m. YTD flows are negative at -$1.26b. The 5-day average is -$45m, worse than the 20-day average of -$26m, but better than the 100-day average of -$28m.
• Philippines: Recorded -$5m in outflows Tuesday, bringing the 5-day total to -$62m. YTD flows remain negative at -$259m. The 5-day average is -$12m, worse than the 20-day average of -$8m, and the 100-day average of -$7m.

Table 1: EM Asia Equity Flows

In Tokyo morning trade, JGB futures are weaker, -14 compared to settlement levels.

• BoJ Governor Ueda warned that rising geopolitical tensions will test the resilience of Asian emerging markets. He noted that global economic fragmentation could further widen monetary policy divergences and that escalating tensions may lead to sudden reversals in cross-border capital flows.
• S&P Global PMIs for February have printed: Composite Index rose to 52 from 51.1 in January, and Services Index rose to 53.7 from 53 in January.
• Today, the local calendar will also see BoJ Rinban Operations covering 1-5-year and 10-25-year JGBs. BoJ Deputy Governor Uchida will also give a speech in Shizuoka.
• Cash US tsys are 1-2bps richer in today’s Asia-Pac session after yesterday’s heavy session.
• Cash JGBs are flat to 2bps cheaper across benchmarks, with a steepening bias. The benchmark 10-year yield is 1.6bps higher at 1.441% versus the cycle high of 1.466%.
• Swap rates are 1-3bps higher. Swap spreads are wider.