Morning from Copenhagen.

Overnight action in Japan was muted around the release of the CPI and PMI, both of which continued printing at levels that should more than suffice for a continuation of rate hikes.

We don’t think much has changed in the USD/JPY (or JGB trade), despite Ueda reiterating an already well-known stance on intervening against a rapid spike in bond yields. At best, this is designed to temporarily temper the trend of higher Japanese bond yields in the long end.

Here’s what’s currently priced in for the BoJ for the rest of the year. With inflation re-accelerating from already unacceptable levels, this may prove too little:

Chart 1: BoJ Pricing for the Rest of 2025