JGBs mixed in muted session; long-term 20-year yield drops to 16-month low

The Japanese government bonds traded narrowly mixed Wednesday as investors remained sidelined in a muted session that witnessed data of little economic significance. However, the US-China trade war tensions continued to pamper market participants into safe-haven assets. Further, the 20-year JGB yield hit a 16-month low, amid solid demand received at an auction held yesterday.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, hovered around 0.02 percent, the yield on the long-term 30-year note fell 1 basis point to 0.71 percent and the yield on short-term 2-year traded tad higher at -0.13 percent by 05:00 GMT.

The Finance Ministry offered 2.2 trillion yen (USD20.75 billion) in 10-year JGBs on Tuesday with a coupon rate of 0.1 percent, in a re-opening of the 350th 10-year JGB. The bid-to-cover ratio was 4.16, down slightly from 4.53 at the previous 10-year JGB auction, but still high enough to suggest that demand at Monday’s auction was robust.

Meanwhile, the Nikkei 225 index traded 0.22 percent higher at 21,339.00 by 05:05 GMT, while at 05:00GMT, the FxWirePro's Hourly JPY Strength Index remained neutral at -30.27 (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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