10-year JGB yields touch 5-month low on rising safe-haven demand; investors eye March trade balance

The 10-year Japanese government bond yields touched 5-month low on Wednesday as investors poured into safe-haven instruments on growing speculation about a global reflation trade amid the United States President Donald Trump administration’s ability to push through its pro-business reforms as well as geopolitical tensions related to North Korea.

The benchmark 10-year bond yield, which moves inversely to its price, hovered around 0.01 percent, the long-term 30-year bond yields fell nearly 1 basis point to 0.76 percent and the yield on the short-term 2-year note traded 1 basis point lower at -0.22 percent by 06:10 GMT.

The Bank of Japan (BoJ) Governor Haruhiko Kuroda, in his latest speech delivered early this week, said that there is need to continue with policy easing till the central bank’s 2 percent inflation goal is reached, which indeed, seems a long way to go. Further, Kuroda said that the BOJ needs to closely monitor consumer prices because they are lacking some upward momentum.

Lastly, the central bank on Wednesday purchased JGBs having a residual maturity of 1-3 years worth JPY2.804 billion, maturity of 3-5 years worth JPY3.503 billion and maturity of 5-10 years worth JPY4.511 billion.

Meanwhile, Japan’s Nikkei 225 closed 0.09 percent higher at 18,432.20, while at 06:00GMT, the FxWirePro's Hourly Yen Strength Index remained neutral at -55.98 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex