FxWirePro: Daily Commodity Tracker - 21st March, 2022 
The short-term JGBs slumped Monday after recent data showed that the country’s trade balance returned to positive territory in September as exports declined at a much slower-than-expected rate.
The benchmark 10-year bond yield, which moves inversely to its price, rose 1 basis point to -0.048 percent, the yield on long-term 30-year Treasury fell nearly 1 basis point to 0.498 percent and the yield on short-term 2-year note rose 2 basis points to -0.236 percent by 06:30 GMT.
The JGBs have been closely following developments in oil markets because of their impact on inflation expectations, which are well below the Bank of Japan's target. Long-term bonds gained as crude oil prices fell after Iraq commented that it wants exemption from any agreement by the OPEC to cut production to prop up the market. The International benchmark Brent futures fell 0.46 percent to $51.54 and West Texas Intermediate (WTI) dipped 0.49 percent to $50.60 by 04:50 GMT.
Japan posted a trade surplus in September at 498.3 billion yen, higher than the market expectations of 366.1 billion yen, recovering from the previous deficit of 19.2 billion yen. Also, exports fell 6.9 percent y/y, smaller than the market consensus of 10.8 percent fall, from 9.6 percent drop seen in August. September has the lowest rate of contraction since March. Additionally, imports dropped 16.3 percent y/y, better than the consensus forecast of -17.0 percent, from prior down -17.2 percent.
Last week, Bank of Japan Governor Haruhiko Kuroda said that the central bank will evaluate appropriate yield curve at every meeting and added that ideal yield curve can change depending on economy and prices. He said that price conditions not very different from September and it is difficult to target specific yield rate or range. He also said that the BoJ's 80 trillion yen QQE target allows for some flexibility, but not immediately thinking of lowering the goal.
Further, Kuroda said that there was a view voiced in the previous BoJ policy meeting that the yield curve should be steeper and there is no need to set rigid range for 10-year JGB yield, and it would be inappropriate to do so. He said the BoJ may slow JGB buying if 10-year yield falls well below its target and does not see immediate possibility of BoJ JGB buying falling sharply from current 80 trillion yen pace. Lastly, he added that the timeframe for achieving 2 percent inflation may be modified at this month's policy meeting from current forecast it will be hit during fiscal 2017.
Lastly, investors will remain keen to focus on the series of upcoming economic data, highlighted by household spending, National CPI, unemployment rate, BoJ’s own CPI number and 10-year bond auction.
Meanwhile, the benchmark Nikkei 225 closed up 0.29 percent at 17234.42 and the broader Topix index closed 0.17 percent higher to 1,367.61 points.
