JGBs slump one expectations of improvement in February consumer inflation

The Japanese government bonds slumped Thursday on expectations of an improvement in the country’s consumer price inflation (CPI) during the month of February. However, the unemployment rate is expected to remain steady, which may add some limelight to the country’s debt market in the near-term.

The benchmark 10-year bond yield, which moves inversely to its price, rose 1 basis point to 0.06 percent, while the long-term 30-year bond yields jumped nearly 1-1/2 basis points to 0.83 percent and the yield on the short-term 2-year note traded nearly 2 basis points higher at -0.23 percent by 05:50 GMT.

Japan's core consumer prices are expected to rise in February at the fastest pace in nearly two years, while factory output is expected to show its most rapid growth since November, driven by rebounding energy prices and a pickup in overseas demand, a Reuters poll found. Economists expect consumer inflation will move towards 1.0 percent later this year but will still fall well short of the Bank of Japan's 2 percent inflation target.

Further, the jobless rate is expected to remain steady at 3.0 percent in February and the jobs-to-applicants ratio to be stable at 1.43, unchanged from January and the highest reading since July 1991, when it was at 1.44.

Meanwhile, Japan’s Nikkei 225 closed 0.86 percent lower at 19,053, while at 06:00GMT, the FxWirePro's Hourly Yen Strength Index remained neutral at -28.15 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex