JGBs rise in muted trading as Asian markets remain shut on eve of Chinese Lunar New Year holidays

Japanese government bonds rose during early Asian session Friday amid a silent trading day that witnessed no data of any primary economic significance, following a shutdown in major Asian markets on the occasion of Chinese New Year holidays.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, slipped 1/2 basis point to 0.06 percent, the yield on the long-term 30-year note hovered around 0.78 percent and the yield on short-term 2-year steadied tad lower at -0.15 percent by 04:55 GMT.

US Treasury yields slipped overnight after sizable gains in recent sessions, as investors took a breather from selling bonds and readjusted positions to prepare for more inflation-related volatility, a scenario that could take yields even higher.

After consumer inflation data came in stronger than expected Wednesday, the 10-year yield hit a four-year high. But traders said the selloff extended too far, leaving hedge funds to unwind their short bets on government paper. The short trades were bets bond prices would fall and serve as a way to insulate investors from rising rates, MarketWatch reported.

Meanwhile, the Nikkei 225 index surged 1.01 percent to 21,694.00 by 04:55 GMT, while at 04:00GMT, the FxWirePro's Hourly JPY Strength Index remained neutral at -17.12 (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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