JGBs edge slightly higher despite strong equities; next week’s GDP data in focus

Japanese government bonds edged slightly higher on Friday despite Nikkei 225 hit highest since February. Markets await the first quarter gross domestic product (GDP) data scheduled to be released on Wednesday.

The yield on the benchmark 10-year JGB note, which moves inversely to its price, traded 1/2 basis point lower at 0.046 percent, the yield on the long-term 30-year note remained steady at 0.740 percent and the yield on short-term 1-year moved 1/2 basis point down to -0.134 percent by 05:00 GMT.

Japan’s benchmark stock index (Nikkei 225) has set a new high for May, and hit a highest since February the struggle now will be to continue the march back up to January's highs near the 24,000.00 level.

The Bank of Japan in its daily open market operation held today bought JPY190 billion worth of bonds of 10-25 years of maturity and JPY70 billion worth of bonds of over 25 years of maturity.

The U.S. Treasuries witnessed an upward pressure in the long-end of the curve following the well-subscribed 30-year Bond auction, contrasted by weaker performance in the 2-year Note. At the time of writing, the benchmark 10-year UST yield was trading at 2.966 percent. Markets now look ahead to a milder flow of data to finish off the week on Friday, highlighted by import prices and University of Michigan consumer sentiment releases.

Meanwhile, the Nikkei 225 index traded 1.01 percent higher at 22,728.50 by 05:10 GMT, while at 05:00GMT, the FxWirePro's Hourly JPY Strength Index remained neutral at -0.31 (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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