JGBs slump on higher risk appetite, Q3 GDP in focus

The Japanese government bonds slumped Tuesday as investors moved away from safe-haven buying amid gains in crude oil prices and the recovery in the equities market.

The benchmark 10-year bond yield, which moves inversely to its price, rose 2 basis point to 0.05 percent, the yield on long-term 40-year note jumped 4 basis points to 0.72 percent and the yield on short-term 3-year note bounced 1/2 basis point to -0.15 percent by 06:30 GMT.

Crude oil prices climbed on fresh buying ahead of OPEC and non-OPEC meeting on Saturday. The International benchmark Brent futures rose to $54.86 (highest since July last year) and West Texas Intermediate (WTI) jumped to $51.41.

Moreover, Bank of Japan board member Makoto Sakurai in his last week’s speech to business leaders in the city of Otsuthe said that the Bank of Japan will continue to purchase massive amounts of government bonds even under its new policy framework targeting interest rates.

Lastly, investors will remain to focus on the upcoming third-quarter gross domestic product (GDP) data and 30-year JGB auction.

Meanwhile, the benchmark Nikkei 225 closed 0.47 percent higher at 18,360.54. While at 06:00 GMT, the FxWirePro's Hourly Japanese Yen Strength Index remained highly bearish at -158.94 (lower than -75 represents bearish trend).