JGBs tad lower in muted trading session on timid improvement in risk sentiments

The Japanese government bonds remained tad lower towards the end of Asian session Friday amid a muted trading day that witnessed data of little economic significance after investors’ risk sentiments improved slightly, with the Nikkei 225 trading range-bound following yesterday’s losses.

The yield on the benchmark 10-year JGB note, which moves inversely to its price, remained tad higher at 0.146 percent, the yield on the long-term 30-year note hovered around 0.907 percent and the yield on short-term 2-year too traded 1/2 basis point higher at -0.114 percent by 05:25GMT.

Stock markets in the US and Asia ended generally lower as the S&P500 closed lower by 2.06 percent, Dow Jones ended with a decrease of 2.13 percent whilst other major Asian markets such as the Shanghai composite finished lower by 5.22 percent, Nikkei 225 by 3.89 percent and Kospi by 4.44 percent. This comes as many had been expecting a market correction but President Trump said, “It’s a correction that I think is caused by the Federal Reserve”, OCBC Bank reported in its Daily Treasury Outlook.

The President further labelled the Fed as “out of control” but stated that he will “not fire” Jerome Powell. US Treasury staff yesterday also found that China isn’t a currency manipulator and they would advise Mnuchin as such despite previous claims by Trump that the country is a manipulator. Trump though is set to meet with Xi Jinping at the G20 summit scheduled to take place at the end of November. This could give some hope that a trade war could be averted, the report added.

Meanwhile, the Nikkei 225 index rose 0.02 percent to 22,591.50 by 05:30GMT, while at 05:00GMT, the FxWirePro's Hourly JPY Strength Index remained neutral at 6.32 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex