JGBs trade range-bound as investors await 10-year auction

Japanese government bonds traded range-bound on Tuesday ahead of the 10-year auction scheduled for September 5. However, investors would focus on any new developments in ongoing global trade conflicts.

The yield on the benchmark 10-year JGB note, which moves inversely to its price, traded nearly flat at 0.114 percent, the yield on the long-term 30-year note remained steady at 0.860 percent and the yield on short-term 2-year stood flat at -0.108 percent by 03:50 GMT.

The OCBC Bank noted in its latest note that with US markets closed for Labor Day holiday yesterday, market focus turned elsewhere - Argentina announced emergency measures yesterday including halving the number of ministries and imposing new export taxes, while its Treasury minister Dujovne is meeting IMF director Largarde to request faster payments from a US$50b credit line.

On the data front, Japan’s capital spending was higher-than-expected, surging 12.8% in Q2, reflecting solid global economic growth. It was the largest increase in 11-years and followed an increase of 3.4% in Q1. On the other hand, the Nikkei manufacturing PMI held at 52.5 for the final reading for August, unchanged from an earlier estimate, but up from 52.3 in July.

“A range of global manufacturing indices pointed to mixed conditions, suggesting confidence is starting to get hit by the ongoing global trade tensions,” note economists at St.George Bank.

Meanwhile, the Nikkei 225 index traded 0.21 percent lower at 22,674 by 03:50 GMT, while at 04:00GMT, the FxWirePro's Hourly JPY Strength Index remained highly bullish at 114.09 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex