10-year JGB yields stall near 3-month high after November industrial production misses expectations

Yields on 10-year JGBs stalled near 3-month high after Japan’s industrial production for the month of November missed market expectations, coming in at 0.5 percent m/m, compared to expectations of and from 0.6 percent m/m in October.

In addition, on Wednesday, the Bank of Japan bought JPY50 billion up to 1-year JGBs, JPY250 billion worth of bonds of 1-3 years of maturity and JPY300 billion worth of bonds of 3-5 years of maturity.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, slipped 1/2 basis point to 0.08 percent, the yield on the long-term 30-year note rose nearly 1 basis point to 0.84 percent and the yield on short-term 2-year traded flat at -0.12 percent by 05:00 GMT.

Bloomberg in its last report said a small shift is taking place in internal discussions among BoJ policymakers, with a minority raising the need to eventually start discussing policy normalization, even though they agree the current stimulus program must continue unchanged for some time, according to people familiar with talks at the central bank.

On the contrary, BoJ Governor Haruhiko Kuroda in its latest speech reiterated the central bank’s resolve to maintain quantitative easing, but his positive comments on inflation and the economy sent the yen to a four-month high versus the dollar. Kuroda also added that the BoJ will continue its aggressive easing, composed of yield curve control and a massive asset-buying program, for as long as needed to achieve its price target.

Meanwhile, the Nikkei 225 index traded 0.34 percent higher at 23,948.50 by 05:05 GMT, while at 05:00GMT, the FxWirePro's Hourly JPY Strength Index remained highly bearish at -106.57 (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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