JGBs trade tad higher on tight supply after BoJ’s regular bond-buying operation

The Japanese government bonds remained tad higher during late Asian session Wednesday after the Bank of Japan (BoJ) conducted its regular bon-buying operation early today, which weighed on the debt supply in the market, thus weighing on bond yields.

Besides, the country’s super-long 30-year bond auction, scheduled to be held on February 7 by 03:35GMT and the household spending data for the month of December, due for release on the same day by 23:30GMT, will provide further inclusions to the bond market.

The yield on the benchmark 10-year JGB note, which moves inversely to its price, fell 1-1/2 basis points to -0.014 percent, the yield on the long-term 30-year edged 1/2 basis point lower to 0.592 percent while the yield on short-term 2-year plunged 16 basis points to -0.159 percent by 06:00GMT.

Japan’s central bank offered to buy JPY430 billion (USD3.92 billion) of 5-10-year JGBs as part of its regular purchasing operation.

Also, the U.S. Treasuries gained during the overnight session, tracking a weaker-than-expected performance of the country’s service sector in January, which also helped JGBs to follow suit.

Lastly, U.S. President Donald Trump’s remarks at the annual State of the Union meeting was barely market-moving, thus creating no visible significant impact on the JGB movements.

Meanwhile, the Nikkei 225 index closed tad higher at 20,881.50, while at 06:00GMT, the FxWirePro's Hourly JPY Strength Index remained neutral at 46.58 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex