JGBs remain range-bound in muted trading session

The Japanese government bonds traded range-bound Thursday as investors remained sidelined in any major trading activity amid lack of significant economic data. This is despite a decent demand at a 30-year auction that underpinned the super-long zone.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, hovered around 0.06 percent, the yield on long-term 30-year tad lower at 0.87 percent and the yield on short-term 2-year traded flat at -0.14 percent by 04:40 GMT.

At the Ministry of Finance’s sale of 800 billion yen of 30-year JGBs with a 0.80 percent coupon, some 55.0218 percent of the bids were accepted at the lowest price of 98.00. The sale drew bids of 3.98 times the amount offered, up from the previous sale’s bid-to-cover ratio of 3.67 times, suggesting improved demand.

Further, investors in Tokyo remained wary ahead of a general election this month. Prime Minister Shinzo Abe hopes to convince voters in the October 22 elections that his “Abenomics” plan consisting of aggressive monetary stimulus, fiscal spending and reform has improved the economy enough to stoke a sustainable recovery.

Meanwhile, Japan’s Nikkei 225 rose 0.47 percent to 20,979.00 by 04:40GMT, while at 04:00GMT, the FxWirePro's Hourly Yen Strength Index remained neutral at -24.84 (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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