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JGBs flat in silent trading day; investors await August industrial production

The Japanese government bonds remained flat in silent trading session Friday as investors remained sidelined in any major trading activity amid lack of significant economic data. Also, investors are looking forward to the release of industrial production for the month of August, scheduled early next week for further direction in the debt market.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, slid nearly 1 basis point to 0.06 percent, the yield on long-term 30-year hovered around 0.87 percent and the yield on short-term 2-year traded flat at -0.14 percent by 04:35 GMT.

In the latest FOMC minutes, the U.S. central bank indicated that an interest rate hike later in 2017 was almost certain, even if low inflation continues to weigh on sentiment. Speeches from leading members of the Fed kept the spotlight on the minutes and the outlook for monetary policy.

Fed Governor Jerome Powell said Fed policy has been and should continue to be gradual in terms of hiking rates. He also argued that a gradual plan to shrink the central bank's balance sheet should help prevent an interest rate spike. The governor added that emerging markets are likely to manage normalization well.

Lastly, the Treasury Department auctioned USD12 billion in 30-year bonds at a high yield of 2.87 percent. The bid-to-cover ratio, an indicator of demand, was 2.53.

Meanwhile, Japan’s Nikkei 225 jumped 1.16 percent to 21,198.00 by 04:40GMT, while at 04:00GMT, the FxWirePro's Hourly Yen Strength Index remained slightly bearish at -99.48 (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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