JGBs trade modestly lower on softer bond-buying operations, investors eye 30-year auction

The Japanese government bonds traded modestly lower Wednesday, following poor buying in the Bank of Japan’s (BoJ) daily bond-buying operations. Also, investors are curiously eyeing the super-long 3-year bond auction, scheduled to be held on February 9.

The benchmark 10-year bond yield, which moves inversely to its price, rose 1/2 basis point to 0.10 percent, while the long-term 30-year bond yields jumped 1-1/2 basis points to 0.92 percent and the yield on the short-term 2-year note surged nearly 2 basis points to -0.20 percent by 06:20 GMT.

The central bank purchased JGBs Wednesday having residual maturity of 1-3 years worth JPY4.002 billion, maturity of 3-5 years worth JPY4.204 billion, maturity of 5-10 years worth JPY4.510 billion and inflation-indexed bonds worth JPY251 million.

Also, the central bank revised up its estimate of Japan’s real gross domestic product (GDP) to +1.5 percent for FY2017/18, compared to +1.3 percent projected in November, for FY2018/19 at +1.1 percent, against the +0.9 percent projected in November.

Meanwhile, Japan’s Nikkei 225 closed 0.51 percent higher at 19,007.60, while at 6:00GMT, the FxWirePro's Hourly Yen Strength Index remained slightly bullish at 90.29 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex