JGBs mixed after July trade balance shrinks into deficit; national CPI data in focus

The Japanese government bonds remained mixed at the time of closing Monday after the country’s trade balance for the month of July shrunk into deficit as investors still eye the national consumer price inflation (CPI) for the similar period, scheduled to be released by end of this week, for further direction in the debt market.

At close, the yield on the benchmark 10-year JGB note, which moves inversely to its price, plunged 23 basis points to -0.229 percent, the yield on the long-term 30-year jumped nearly 3 basis points to 0.213 percent and the yield on short-term 2-year slumped 28 basis points to -0.283 percent.

The United States President Donald Trump said the US is “doing very well with China, and talking!’ but hinted “Huawei is a company that we may not do business with at all”. Over in China, PBoC is set to replace its benchmark lending rate with the loan prime rate whose pricing will be linked to the one-year medium-term lending facility, which is viewed as more market-driven, in a long-awaited reform, OCBC Treasury Research reported.

"The JPY and CHF may remain waterlogged pending further developments on the risk appetite front.  Essentially, investors may require more positive headlines this week to shake off the malaise from last week," OCBC Bank further commented in a separate report.

Meanwhile, the Nikkei 225 index closed -0.71 percent down at 20,563.16.