JGBs trade tad higher on hopes of fall in December national core CPI; BoJ Governor Kuroda’s speech eyed

The Japanese government bonds remained mixed on Wednesday ahead of the country’s national consumer price inflation (CPI) data and Bank of Japan (BoJ) Governor Kuroda’s speech, both scheduled to for later in the week for further direction in the debt market.

The yield on the benchmark 10-year JGB note, which moves inversely to its price, fell 1 basis point to -0.006 percent, the yield on the long-term 30-year note slipped 1/2 basis point to 0.696 percent while the yield on short-term 2-year nearly 16 basis points to -0.157 percent by 05:40GMT.

According to a report from Bloomberg, the BoJ is almost certain to cut its inflation forecast for the fiscal year starting in April given the sharp fall in oil prices, according to people familiar with the matter.

The central bank’s current forecast is for inflation to average 1.4 percent next fiscal year, a figure that private economists judge to be overly optimistic. Oil prices have dropped about 20 percent since the last quarterly outlook report in October.

However, there are no indications that monetary policy will be changed at the monetary policy gathering on January 23 because these pressures are seen as temporary and don’t change the picture of underlying inflation, the report added.

Meanwhile, the Nikkei 225 index traded 0.64 percent lower at 20,424.50 by 05:45GMT, while at 05:00GMT, the FxWirePro's Hourly JPY Strength Index remained neutral at -27.83 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex