Japanese Buying Foreign Bonds (JPY)(May 3) W/W 309.9bln; Foreign Buying Japanese Bonds (JPY)(May 3) W/W 267.0bln. Japan turned net buyers of foreign bonds for the first time in 7 weeks.
Japanese Current Account Total (JPY)(Mar) M/M 1251.2bln vs. Exp. 1220.0bln (Prev. 637.4bln).
Japanese Trade Balance - BOP Basis (JPY)(Mar) M/M -219.9bln vs. Exp. -274.0bln (Prev. -677.0bln)
Japanese Economic Minister Amari said Japan is not manipulating the currency market and the level is determined by the market. He added that the government will take steps to deal with impact of higher import prices. (Newswires)
The South Korean Finance ministry said South Korea is worried about the pace of JPY decline. (Newswires) There were also reports that South Korea is mulling options to help exporters who are negatively affected by the JPY weakness. (Yonhap)
10 year JGBs trended lower overnight (heading into the European open down 97 ticks at 143.75) and triggered a circuit breaker which halted trade after declining by a point. This resulted in 10 year JGB yields rising to 0.700%, its highest since Feb. 25. Movements lower in JGBs were also tracked by US T-notes, which moved lower 7+ ticks. The Nikkei 225 (+2.8%) rallied to break above 14600, supported by a weaker JPY as USD/JPY broke above the 101.00 level. (RANsquawk)
ECB's Kranjec said Slovenia should be able to avoid a bailout. (Newswires)
The Cypriot foreign minister has confirmed Russia has agreed to extend the terms of its loans to Cyprus as part of its participation in the bailout of the country. (Newswires) Earlier in the week, sources said Russia had agreed to extend the maturity of its EUR 2.5bln loan by 2 years and cut the interest rate.
Chancellor Osborne said the BoE may wish to employ explicit forward guidance. (Newswires) Osborne previously raised this subject during his budget earlier this year.
In the FX markets, USD/JPY breached above the 101.00 level before retreating but still currently trades within striking distance to the psychologically significant level. Advances in USD/JPY were supported by widespread USD strength amid positive US data and rumours of tapering off QE early, combined with JPY weakness after data showed Japan turned net buyers of foreign bonds for the first time in 7 weeks. (RANsquawk)
Reserve Bank of Australia cuts 2013 inflation forecast to 2.5% from 2% - 3%; keeps GDP 2013 forecast little changed at 2.5%. (Newswires)
New Zealand finance minister English says not willing to put public balance sheet at risk and that New Zealand isn't in a currency war. English further commented that New Zealand has a relatively high currency. (Newswires)
Israeli PM Netanyahu says Iran may close strait of Hormuz and block world shipping if it gets nuclear weapons. (Channel 2)
WTI crude futures traded in a tight range overnight, heading into the European open with minor declines (down USD 0.56 at USD 95.82) amid a stronger USD. (RANsquawk)
Goldman Sachs forecasts the Brent -WTI spread to narrow further, citing additional Cushing pipeline capacity and said that the premium may drop as low as USD 5/bbl in Q3. (Newswires)
T-notes closed the session in minor negative territory, trading in a range of 132.23 – 132.31+ throughout yesterday. Yesterday’s 30y auction was relatively well received, despite analysts expecting a weak auction. The yield stopped through the WI by 1bps and indirects were greater than the average of the previous 5 auctions. In the reaction to the stronger than expected auction, T-notes moved to the upside and the 30y moved 12 ticks higher. The move was not sustained however and heading into the close, T-notes erased the gains seen following the auction. At the pit close T-notes settled down 2 ticks at 132.23. T-notes fell overnight along side JGBs in Tokyo, down 4+ ticks at 132.18+ last. (RANsquawk)
You can now follow real-time news headlines on the move with the new RANsquawk app available to download for free at ransquawk.com/mobile_app for Apple iPhone, Blackberry and Android users. Please note the headlines can be viewed on the app between 0630BST/0030CST to 2200BST/1600CST Monday to Friday but does not include Asian-Pacific news.