JGB 10-year yield slump to over 2-year low tracking global peers after Fed delivers dovish stance

The Japanese 10-year government bond yield slumped to over 2-year low Friday tracking a buying in the global debt market after the Federal Reserve delivered a dovish stance at its monetary policy meeting held on Wednesday.

According to a report from Reuters, debt prices have rallied across developed markets after the FOMC concluded its three-year drive to tighten monetary policy, with European yields also sliding sharply, signalling the growing belief that all major central banks are now looking to keep monetary conditions easy.

The yield on the benchmark 10-year JGB note, which moves inversely to its price, plunged 6 basis points to -0.066 percent, the yield on the long-term 30-year slumped 4 basis points to 0.533 percent and the yield on short-term 2-year suffered 9 basis points to -0.170 percent by 06:30GMT.

In the global markets, attention was largely focused on the ongoing Brexit developments, with the latest being that European leaders have agreed to give the UK two weeks until April 12 to avoid a no-deal Brexit and for the UK to indicate a way forward if the withdrawal agreement does not go through, or until May 22 (before the European Parliament elections) if the deal is approved next week, OCBC Treasury Research reported.

Lastly, today’s early release showed that Japan’s core consumer prices rose 0.7 percent in February compared to a year ago period, slowing from the previous month’s pace.

Meanwhile, the Nikkei 225 index closed flat at 21,608.50, while at 06:00GMT, the FxWirePro's Hourly JPY Strength Index remained neutral at 56.86 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex