JGBs flat in muted trading, investors cover previous short positions

The Japanese government bonds remained flat Friday as investors covered previous short positions amid a muted trading session that witnessed data of little economic significance.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, hovered around 0.01 percent, the yield on the long-term 30-year flat at 0.83 percent and the yield on short-term 2-year traded 1-1/2 basis points lower at -0.17 percent by 04:10 GMT.

The headline Japan Manufacturing Purchasing Managers’ Index (PMI), a composite single-figure indicator of manufacturing performance, was little changed during August at a level of 52.2, compared to July’s 52.1. The latest reading was indicative of solid growth, and the PMI has now recorded above the 50.0 no-change mark for 12 successive months.

Finally, business confidence remained inside positive territory during August. Nearly 27 percent of the survey panel is forecasting growth in production, with the Olympics in 2020 and hopes of an ongoing improvement in the economic environment reported as factors supporting positive sentiment. That said, confidence weakened to the lowest recorded by the survey since March.

Meanwhile, Japan’s Nikkei 225 traded 0.05 percent higher at 19,656.50 by 04:20GMT, while at 04:00GMT, the FxWirePro's Hourly Yen Strength Index remained neutral at -19.90 (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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