Yield on 10-year JGBs hits highest since October 23, up nearly 2bps

Japanese government bonds slumped on Wednesday following board weakness in the U.S. Treasuries. Yields on the benchmark 10-year US Treasury hit a nine-month high overnight, climbing to 2.5 percent after the Bank of Japan’s trimmed its purchases of super-long debt.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose nearly 2 basis points to 0.08 percent, the yield on the long-term 30-year note surged nearly 1-1/2 basis points to 0.84 percent and the yield on short-term 2-year climbed nearly 1 basis point to -0.12 percent by 05:15 GMT.

On Tuesday, the BoJ bought JPY190 billion of 10 - 25 Year JGBs in today's operation, lower compared to 200 billion yen seen in its last time operation. Also, the central bank purchased JPY80 billion worth of bonds of more than 25-year of maturity, less than 90 billion from the last operation.

In the United States, Treasuries saw downward pressure across most of the curve, despite little change in the short-end, highlighted by the 10-year Note yield breaking above the 2.50 percent mark for the first time in the past ten months, alongside further gains in equities following the earlier announcement from the Bank of Japan (BoJ) of plans to purchase fewer long-term JGBs.

Meanwhile, the Nikkei 225 index traded 0.21 percent lower at 23,795.00 by 05:20 GMT, while at 05:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at 16.65 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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