The Japanese government bonds gained Monday as the country’s benchmark stock indices remained lower, following the United States President Donald Trump’s protectionist speech in the 45th Presidential Inaugural ceremony held on Friday.
Also, investors are curiously eyeing the release of December consumer price inflation data, scheduled for Friday, besides, the Bank of Japan’s (BoJ) first 2-day monetary policy meeting 2017, scheduled to be held on January 31.
The benchmark 10-year bond yield, which moves inversely to its price, edged down 1 basis point to 0.05 percent, while the long-term 30-year bond yields fell 1-1/2 basis points to 0.78 percent and the yield on the short-term 2-year note remained nearly flat at -0.24 percent by 06:10 GMT.
In his much anticipated inauguration speech, President Trump largely focused on the main principle that won him the election: a strong anti-establishment message and putting America above all else.
He further added that protectionism will lead to great prosperity and strength and that he will fight for it thoroughly, putting his country on the top priority every time.
Moreover, the BoJ purchased JGBs having residual maturity of up to 1 year worth JPY3.24 billion, maturity of 5-10 years worth JPY16.29 billion. The JGBs have been closely following developments in the U.S. debt market. The U.S. benchmark 10-year bond yields slumped 3 basis points to 2.43 percent, from Friday’s low of 2.44 percent.
Lastly, the BoJ’s first two-day monetary policy meeting for 2017 will take place on January 30-31. We foresee that the central will remain committed to hold its 10-year JGB yields near zero, while keeping interest rate steady at -0.10 percent.
Meanwhile, Nikkei 225 closed -1.29 percent lower at 18,891.03, while at 6:00GMT, the FxWirePro's Hourly Yen Strength Index remained slightly bullish at 83.57 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex
