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A Japanese national flag flies outside the Bank of Japan (BOJ) headquarters in Tokyo, Japan, on Wednesday, Sept. 21, 2016. The BOJ shifted the focus of its monetary stimulus program Wednesday, seeking greater flexibility to manage its side effects while strengthening its commitment to stoking inflation over the longer term. Photographer: Kiyoshi Ota/Bloomberg

Japanese Govt. Bonds tad lower after Nikkei 225 surges to 7-month high following hopes of ease in u.s.-china trade tensions

Japanese Govt. Bonds tad lower after Nikkei 225 surges to 7-month high following hopes of ease in u.s.-china trade tensions

Japanese government bond prices trade tad lower during late Asian session Friday after Nikkei 225 surged to a 7-month high following renewed hopes of ease in trade tensions between the United States and China.

The yield on the benchmark 10-year JGB note, which moves inversely to its price, remained tad higher at 0.111 percent, the yield on the long-term 30-year note also climbed 1/2 basis point to 0.842 percent and the yield on short-term 2-year traded nearly flat at -0.108 percent by 05:40GMT.

According to a report from Reuters, a regular debt-purchasing operation by the Bank of Japan, however, helped limit JGB losses, however.

US President Trump also tweeted that there is “no pressure” to reach a trade agreement with China, but this did not significantly douse market hopes for the next US-Sino trade talks. Wall Street rose, led by tech stocks, while the UST bonds traded in a range (10-year yield rose 1bp to 2.97 percent) and the USD slipped amid softer than expected US inflation data (headline CPI rose 0.2 percent m/m and 2.7 percent y/y in August, with core CPI up just 0.1 percent m/m and 2.2 percent y/y), OCBC Daily Treasury Outlook reported.

Meanwhile, the Nikkei 225 index jumped 1.12 percent higher at 23,084 by 05:50GMT, while at 05:00GMT, the FxWirePro’s Hourly JPY Strength Index remained highly bearish at -124.812 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

Source: FXWire Commentary

 

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