JGBs trade flat in silent session ahead of July household spending data

Japanese government bonds traded flat amid a muted session that witnessed data of little economic significance. Investors will now keep an eye over the country’s household spending data for the month of July, scheduled to be released on September 6 by 23:30GMT for further insight into the debt market.

The yield on the benchmark 10-year JGB note, which moves inversely to its price, traded flat at 0.116 percent, the yield on the long-term 30-year note also remained steady at 0.857 percent and the yield on short-term 2-year too hovered around -0.113 percent by 03:50 GMT.

On Tuesday, the Bank of Japan (BoJ) had undertaken a small cut in its monthly bond-buying amounts, having over 3-5 years of maturity. The central bank offered to buy JPY350 billion of 3-5 year maturity bonds but market participants have largely shrugged-off this move, forcing JGBs to remain range-bound.

Further, Japan’s seasonally adjusted Business Activity Index - was recorded at 51.5 in August. This was up from 51.3 in July, signalling an improved rate of growth in Japanese service sector output, a report from Nikkei confirmed. Also, With output growth likewise accelerating in the manufacturing sector, the Nikkei Composite Output Index rose to 52.0 in August, from 51.8 in July to signal a broad-based pick up in the Japanese private sector economy.

Meanwhile, the Nikkei 225 index traded 0.22 percent lower at 22,648.00 by 03:50 GMT, while at 04:00GMT, the FxWirePro's Hourly JPY Strength Index remained neutral at 2.83 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex