More News Out of Japan While Markets Await US Data

Rates close nearly flat ahead of GDP, PCE data. The front end of the yield curve fell ~3bps while the belly and long end rose 1-2bps. Most of the price action occurred overnight as the 2-year yield opened ~3bps lower before trading within a ~3bp range the remainder of the session. Tomorrow’s session should be more volatile as markets prepare for 2Q24 GDP and inflation data. The data are expected to remain flat at 2.8% and 2.9% growth, respectively. Meanwhile, Nvidia’s share price fell in after-hours trading as their Q2 revenue beat was relatively muted compared to previous quarters while concerns emerged over production setbacks for its new Blackwell chip.

Bank of Japan (BoJ) messaging offers hint of renewed consistency. Just two weeks after BoJ Deputy Governor Uchida said the bank would refrain from further rate hikes if markets remained volatile, Governor Ueda offered comments last week indicating he is still committed to hiking if inflation continues to move toward 2%. Today, Deputy Governor Himino reiterated that stance, saying “There is no change to our stance that we would adjust monetary easing if economic activity and prices are likely to meet projections.” Still, he did mention the need to watch financial markets “with an extremely high sense of urgency,” indicating another hike isn’t imminent. The Yen weakened after Himino’s comments, falling to ~144 per US dollar.

Bureau of Labor Statistics to take new steps to prevent data release mishaps. The BLS, the agency responsible for the release of key economic data, has been under fire recently for several recent mishaps. That includes a 30-minute delay in last week’s data that showed an 818k downward revision to nonfarm payrolls for the year that ended in March 2024. What made matters worse is that staff provided the data to callers before the release was made publicly available. The BLS has pledged to use multiple forms of distribution for each data release moving forward, including social media posts.