JGBs remain flat after industrial production fails to cheer markets in July

The Japanese government bonds remained flat Thursday after the country’s industrial production for the month of July failed to revive markets.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, hovered around 0.01 percent, the yield on long-term 30-year flat at 1.04 percent and the yield on short-term 2-year traded tad nearly 1 basis point lower at -0.15 percent by 04:10 GMT.

Japan’s industrial production fell 0.8 percent (forecast -0.3 percent) in July from June, when it increased by 2.2 percent. Year-on-year production climbed 4.7 percent (forecast +5.2 percent). However, production is forecast to rise 6.0 percent this month and drop 3.1 percent in September.

The data suggest that Japan’s economic recovery is losing some steam, according to Bloomberg Intelligence economist Yuki Masujima in his analysis. He predicts output will decline in the third quarter, breaking five quarters of consecutive gains. A drop in the shipments of capital goods may also indicate downside risk for business investment, Bloomberg reported.

Meanwhile, Japan’s Nikkei 225 traded 0.85 percent higher at 19,672.00 by 04:10GMT, while at 04:00GMT, the FxWirePro's Hourly Yen Strength Index remained highly bearish at -114.48 (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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