did a lap today, rising soon after the Japanese data was published
but soon dropping back again to be little net changed for the session
CPI for May was mixed. Headline inflation was lower than estimates
while core’ (Japanese core inflation excludes fresh food) had its
second month in a row above 2%. ‘Core-core’ (excluding fresh food
and energy and which is closest to the US measure of core CPI) came
in at a relatively (for Japan) strong 0.8%. Only a week ago the Bank
of Japan reaffirmed, again, its commitment to its current loose
policy. The Bank is being pressure on its YCC though. While it has
the yield on 10-yr JGBs held to the desired ceiling yields are
popping up on those maturities not being targeted by the Bank. There
are plenty in the market looking for the BOJ to be forced into
relenting on YCC. The next meeting is not until July 20-21 though and
I can’t see any change outside a scheduled meeting from the BOJ.
Stay tuned though!
flow otherwise was very light; the UK consumer sentiment survey a
record low. Cable is net up a few tics on the session though.
flow was pretty much the same.
FX major FX was subdued.
USD/JPY 10 minute candles: