JGBs gain towards end of trading week; falling U.S. 10-year yields cushion debt prices

Japanese government bonds gained as we approach towards the end of the week on Thursday, following a massive decline sparked off in the United States 10-year yields, post minutes of the FOMC’s May monetary policy meeting, released late yesterday. Also, a solid sell-off in the Turkish Lira in the overnight session crowded demand for safe-haven bonds.

The yield on the benchmark 10-year JGB note, which moves inversely to its price, fell 1/2 basis point to 0.04 percent, the yield on the long-term 30-year note slumped 1-1/2 basis points to 0.74 percent and the yield on short-term 2-year remained flat at -0.14 percent by 05:10GMT.

The U.S. 10-year Treasury yields continued to fall, after minutes released Wednesday from the Federal Reserve’s early May meeting showed the central bank was willing to tolerate a short-term overshoot of its 2% inflation target.

Yields also witnessed a crackdown during early North American session Wednesday as investors crowded into safe-haven assets, following a massive sell-off in the Turkish Lira. The latter dropped more than 5 percent before recovering some ground, the latest sell-off that reflects growing investor alarm over the direction of monetary policy under President Tayyip Erdogan.  

Meanwhile, the Nikkei 225 index traded 1.33 percent lower at 22,387.50 by 05:10 GMT, while at 05:00GMT, the FxWirePro's Hourly JPY Strength Index remained neutral at 53.19 (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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