JGBs nearly flat ahead of BoJ’s July monetary policy meeting minutes

The Japanese government bonds traded nearly flat Monday as investors wait to watch the Bank of Japan’s (BoJ) July monetary policy meeting minutes, scheduled to be released on July 25. Also, the International Monetary Fund’s (IMF) higher revision of the latest GDP forecasts for 2017 and 2018, added sluggishness to the country’s debt market.

The benchmark 10-year bond yield, which moves inversely to its price, hovered around 0.06 percent, the long-term 30-year bond yields traded flat at 0.86 percent and the yield on the short-term 2-year note remained tad lower at -0.11 percent by 04:20 GMT.

The IMF in its latest global GDP growth forecasts from the World Economic Outlook for 2017 and 2018, said that it expected slightly higher growth in Japan this year to 1.3 percent from a forecast of 1.2 percent in April, citing stronger first-quarter growth buoyed by private consumption, investment and exports. Its forecast for Japan's 2018 growth was unchanged at 0.6 percent.

The BoJ in its latest monetary policy meeting, held last week kept its short-term interest rate target unchanged at -0.1 percent and the 10-year JGB yield target around zero percent, pushing back again the timing for achieving its 2 percent inflation target, with a pledge to buy JGBs so that its holdings increase at an annual pace of around JPY80 trillion.

Meanwhile, Japan’s Nikkei 225 slumped 0.91 percent to 19,917.00 by 04:20GMT, while at 04:00GMT and the FxWirePro's Hourly Yen Strength Index remained neutral at -1.48 (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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