Japanese government bonds traded slightly higher on the first trading day of the week as geopolitical tensions continued to bother investors’ sentiments, leading to a rise in demand for safe-haven bonds, thus weighing on bond yields.
The yield on the benchmark 10-year JGB note, which moves inversely to its price, hovered around 0.095 percent, the yield on the long-term 30-year note remained tad lower at 0.85 percent and the yield on short-term 2-year slipped nearly 1/2 basis point to -0.129 percent by 05:20GMT.
Turkey was the main contagion on EM markets last week, with S&P effecting a one notch downgrade to B+/Stable from BB-/Stable. However, risk sentiments appeared to have stabilised somewhat on Friday - Wall Street had closed higher on Friday, with the 10-year UST bond yield at 2.87 percent and the USD lower, OCBC Treasury Research reported in its Daily Outlook report.
With Turkish markets closed for this week, Asian markets may tread water today as investors ponder the US-Sino trade war developments (with a WSJ report of a potential bilateral Trump-Xi summit in November) and await further market cues, the report added.
Other key events to watch this week include the FOMC minutes on August 23, the next USD16 billion tranche of US tariffs on Chinese imports to come into effect from August 23 as well, and US’ durable goods orders data on August 24.
Meanwhile, the Nikkei 225 index fell 0.24 percent to 22,218.00 by 05:25GMT, while at 05:00GMT, the FxWirePro's Hourly JPY Strength Index remained neutral at -33.45. For more details, visit http://www.fxwirepro.com/currencyindex


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