JGBs flat as investors await September national consumer price inflation

The Japanese government bonds remained flat during early Asian session Thursday as investors remain focused to watch the country’s national consumer price-led inflation index for the month of September, scheduled to be released on October 27 by 19:30GMT.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, hovered around 0.06 percent, the yield on long-term 30-year traded flat at 0.86 percent while the yield on short-term 2-year traded 1-1/2 basis points lower at -0.14 percent by 03:50 GMT.

Despite four years of massive quantitative easing, core consumer prices are forecast to have risen only 0.8 percent in September from a year ago, less than half the BOJ’s inflation target.

In its monthly economic report for October released on Wednesday, the Japanese government also maintained its optimism that exports and industrial output will continue to drive growth in the world’s third-largest economy.

The government said capital expenditure is “picking up”, unchanged from the wording it used a month earlier, reflecting gains in machinery orders and shipments of capital goods. The report also said exports and output are “picking up”, again the same assessment as last month, as demand from overseas economies remained firm.

Meanwhile, Japan’s Nikkei 225 rose 0.30 percent to 21,772.50 by 03:55GMT, while at 03:00GMT, the FxWirePro's Hourly Yen Strength Index remained neutral at -49.46 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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