Japanese bonds rise modestly in quiet trade; next week’s consumer inflation in focus

The Japanese government bonds traded modestly firmer Friday as trading activity remained quiet with no major economic data or reports expected throughout the day.

The benchmark 10-year bond yield, which moves inversely to its price, fell nearly 1 basis point to -0.086 percent, the super-long 30-year JGB yield dipped 2 basis points to 0.337 percent, the 5-year JGB yield tumbled 1 basis point to -0.176 percent and the short-term 2-year JGB yield slid nearly 1 basis point to -0.203 percent by 07:00 GMT.

The JGBs have been closely following developments in oil markets because of their impact on inflation expectations, which are well below the Bank of Japan's target.

The crude oil prices climbed for a seventh straight day, with Brent crude rising above $50 for the first time in six weeks as the world's biggest producers prepared to discuss a possible freeze in production levels. The International benchmark Brent futures rose 0.02 percent to $50.90 and West Texas Intermediate (WTI) jumped 0.27 percent to $48.35 by 04:50 GMT.

According to Reuters, the BoJ purchased ¥400bn of 1s to 3s, ¥420bn of 3s to 5s, and ¥430bn of 5s to 10s under its JGB purchase program.

Lastly, investors will remain keen to focus on the next week’s July national consumer inflation and BoJ’s own inflation number.

Meanwhile, the benchmark Nikkei 225 closed up 0.36 percent at 16,545.82 and the broader Topix index also closed 0.38 percent higher to 1,295.67 points.