JGBs rally on dull investors’ sentiments; eyes on 30-year auction, Q4 GDP data

The Japanese government bonds rally sharply during early Asian session Monday, following dull sentiments among investors as equities took a slide ahead of the country’s 30-year auction, scheduled to be held on March 6 by 03:45GMT. Also, the fourth-quarter gross domestic product (GDP), due on March 7 by 23:50GMT will add detailed direction to the debt market.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, slumped 2-1/2 basis points to 0.04 percent, the yield on the long-term 30-year note declined nearly 1-1/2  basis points to 0.75 percent and the yield on short-term 2-year plunged 2 basis points to -0.17 percent by 04:55 GMT.

According to the latest Reuters poll, a majority of the analysts see the Japanese economy expanding at a faster growth rate in the final quarter of 2017 versus previously estimated, boosted by bullish capital expenditure.

The poll also found the Bank of Japan is expected to keep its short-term interest rate at minus 0.1 percent and the 10-year government bond yield target at around zero percent when policymakers meet on March 8-9.

Meanwhile, the Nikkei 225 index slumped 1.07 percent to 20,955.00 by 04:55 GMT, while at 04:00GMT, the FxWirePro's Hourly JPY Strength Index remained neutral at 32.14 (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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