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JGBs flat after better-than-expected January trade balance, fall in Reuters Tankan manufacturers’ sentiment index; BoJ member Funo’s speech eyed

Japanese government bonds traded tad lower Monday, following better-than-expected trade balance data for the month of January, released overnight, in contrast to the Reuters Tankan manufacturers’ survey for this month, which showed a decline in the figures.

Investors will now be looking forward to the Bank of Japan’s policymaker Funo’s speech, for added direction in the debt market.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, hovered around 0.06 percent, the yield on the long-term 30-year note remained flat at 0.79 percent and the yield on short-term 2-year traded tad lower at -0.15 percent by 04:30 GMT.

Japan’s Ministry of Finance (MOF) data showed on Monday that exports grew 12.2 percent in January from a year earlier, following a 9.3 percent year-on-year gain in the previous month. The result handily beat a 10.3 percent increase expected by economists in a Reuters poll.

Exports to China, Japan’s biggest trading partner, jumped 30.8 percent year-on-year in January, due in part to an export surge before the Lunar New Year that happened later than last year. The gain was led by semiconductor production equipment, car engines, and hybrid cars.

In contrast, the Reuters Tankan sentiment index for manufacturers stood at 29 in February, down from the previous month’s 11-year high of 35, the survey conducted January 31 to February 14 found. The monthly poll closely tracks the Bank of Japan’s key quarterly Tankan.

Meanwhile, the Nikkei 225 index remained flat at 21,720.25 by 04:35 GMT, while at 04:00GMT, the FxWirePro's Hourly JPY Strength Index remained slightly bullish at 91.53 (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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