JGBs gain on short-covering, lower-than-expected December CPI

Japanese government bonds gained on the last trading day of the week Friday as investors covered previous short positions and as the country’s national consumer price inflation index for the month of December disappointed market expectations, albeit higher than the previous reading in November.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, slipped nearly 1 basis point to 0.07 percent, the yield on the long-term 30-year note traded tad lower at 0.82 percent and the yield on short-term 2-year remained flat at -0.12 percent by 04:15GMT.

The core consumer price index, which includes oil products but excludes fresh food prices, compared with economists' median estimate for a 0.9 percent annual gain. Stripping away the effect of fresh food and energy, consumer prices rose 0.3 percent in December from a year ago.

Further, core consumer prices in Tokyo, available a month before the nationwide data, rose 0.7 percent in January from a year earlier, versus a 0.8 percent annual rise seen by analysts in a Reuters poll.

Meanwhile, the Nikkei 225 index traded 0.15 percent lower at 23,633.00 by 04:20GMT, while at 04:00GMT, the FxWirePro's Hourly JPY Strength Index remained neutral at -55.22 (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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