JGBs jump as investors await July consumer price inflation

The Japanese government bonds jumped Thursday as investors wait to watch the country’s consumer price inflation for the month of July, scheduled to be released today by 23:30GMT amid an otherwise muted trading session where participants are closely eyeing the Jackson Hole Symposium, starting today.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 1 basis point to 0.03 percent, the yield on long-term 30-year also slipped 1 basis point to 0.82 percent and the yield on short-term 2-year traded nearly 1-1/2 basis points lower at -0.14 percent by 05:20 GMT.

The results of the Reuters Corporate Survey underscore the view that authorities may not have the means to bring about an escape to deflation, with respondents noting it has become too entrenched and that the mind-set of a rapidly ageing but mostly middle-class population worried about pensions hinders any exit.

On the 2 percent inflation goal itself, 53 percent respondents said it should be maintained, while 20 percent believed it should be lowered and 24 percent said it should be ditched altogether. According to a Reuters report, Japan's core consumer prices were expected to show their seventh straight month of annual increases in July, offering the central bank some hope a strengthening economic recovery will gradually lift inflation toward its 2 percent target.

Meanwhile, Japan’s Nikkei 225 traded 0.32 percent lower at 19,374.50 by 05:20GMT, while at 05:00GMT, the FxWirePro's Hourly Yen Strength Index remained neutral at 69.32 (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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