JGBs edge down taking cues from U.S. Treasuries, softer demand at 30-year auction

The Japanese government bonds edged down Tuesday, taking cues from an overnight performance of the U.S. Treasuries in choppy trading on Monday after Friday's stronger-than-expected U.S. non-farm payrolls report, with no real influences ahead of government bond and corporate supply this week.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 1/2 basis point to 0.07 percent, the yield on long-term 30-year note hovered around at 0.88 percent and the yield on short-term 2-year too traded flat at -0.10 percent by 04:50 GMT.

Former Bank of Japan (BoJ) Deputy Governor Kazumasa Iwata criticized the central bank's price forecasts as too optimistic and warned that even hitting 1 percent inflation could be challenging given a recent batch of weak price data, Reuters reported.

"The BoJ should slow its annual bond buying to around JPY40 trillion (USD362 billion) from the current JPY80 trillion. That would make its policy more sustainable," Reuters reported on Monday, citing Former BoJ Deputy Governor Kazumasa Iwata, calling on the bank to proceed with a slowdown in its bond buying that is already underway.

Iwata's views on monetary policy are closely watched as he is considered by markets as among the few strong contenders to replace Governor Haruhiko Kuroda when his five-year term ends in April. He also said the bank should consider reducing ETF buying at some point, given the distortions it is creating in the market.

Meanwhile, Japan’s Nikkei 225 traded 0.31 percent lower at 19,994.00 by 05:00GMT and the FxWirePro's Hourly Yen Strength Index remained neutral at 21.55 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest