The Japanese government bonds traded mixed Friday post a healthy open market operation (OMOs) by the Bank of Japan today. However, the country’s long-term bond yields jumped in intra-day trading, following current firmness in the United States debt market.
Also, investors remain keen to watch the U.S. President-elect Donald’s Trump’s Inauguration Ceremony later in the day, for further direction in the debt market.
The benchmark 10-year bond yield, which moves inversely to its price, fell 1 basis point to 0.06 percent, while the long-term 30-year bond yields jumped 3 basis points to 0.80 percent and the yield on the short-term 2-year note remained fell nearly 1 basis point to -0.23 percent by 06:45 GMT.
Moreover, the BoJ purchased JGBs having residual maturity of 1-3 years worth JPY10.37 billion, maturity of 3-5 years worth JPY8.36 billion, 10-25 years maturity worth JPY4.70 billion and super-long bonds having maturity over more than 25 years worth JPY3.51 billion.
The JGBs have been closely following developments in the U.S. debt market. The U.S. benchmark 10-year bond yields jumped 4 basis points to 2.45 percent, from yesterday’s low of 2.41 percent.
Further, according to a recent report from the Japanese press, the central bank is expected to upgrade its assessment of the economy, with higher forecasts of growth and inflation, following upbeat recovery in domestic consumption and higher disposable household income.
Lastly, the BoJ’s first two-day monetary policy meeting for 2017 will take place on January 30-31. We foresee that the central will remain committed to hold its 10-year JGB yields near zero, while keeping interest rate steady at -0.10 percent.
Meanwhile, the benchmark Nikkei 225 traded 0.38 percent higher at 19,145, while at 6:00GMT, the FxWirePro's Hourly Yen Strength Index remained highly bearish at -109.305 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex
