JGBs mixed ahead of September industrial production, BoJ’s monetary policy statement

The Japanese government bonds closed mixed Tuesday ahead of the country’s industrial production data for the month of September, scheduled to be released on October 30 by 23:50GMT and the Bank of Japan’s (BoJ) monetary policy meeting, due to be held on October 31 shall provide further direction to the debt market.

At close, the yield on the benchmark 10-year JGB note, which moves inversely to its price, remained 11 basis points down at -0.111 percent, the yield on the long-term 30-year jumped 2 basis points to 0.450 percent and the yield on short-term 2-year suffered 20 basis points to -0.207 percent.

Brexit concerns also ebbed as the EU granted a Flextension (flexible extension) of the Brexit deadline to January 31, whilst the UK Parliament rebuffed PM Boris Johnson’s bid for snap elections for a third time even as he intends to try again today, OCBC Treasury Research reported.

For the week ahead, Wednesday will print US’ 3Q GDP growth (forecast: 1.6 percent annualised q/q, down from 2.0 percent in 2Q) and the BoC policy decision (likely to be static at 1.75 percent), but Thursday will be the main focus with the FOMC (widely expected to cut another 25bps, but whether it will be a hawkish cut or if Powell will signal more dovish intentions ahead will be the key) and the BoJ (questionable if any monetary policy easing will actually be forthcoming to counter the effects of the recent sales tax hike), the report added.

Meanwhile, the Nikkei 225 index remained -0.34 percent higher at 22,945.50 by 05:30GMT.