JGBs narrowly mixed ahead of super-long 30-year auction; month-end BoJ decision also in focus

The Japanese government bonds traded narrowly mixed Tuesday ahead of the super-long 30-year auction scheduled to be held on Wednesday. Also, the Bank of Japan’s (BoJ) first monetary policy meeting of 2017 remain in focus toward the end of this month.

The benchmark 10-year bond yield, which moves inversely to its price, hovered around 0.05 percent mark, the long-term 30-year bond yields rose nearly 1 basis point to 0.74 percent and the yield on short-term 2-year note slid over 2 basis points to -0.23 percent by 06:20 GMT.

Moreover, some amount of buying was observed along the short-term curve, barring the super-long as investors averted from riskier assets including equities and crude oil following Brexit fear.

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, the benchmark Nikkei 225 ended 0.79 percent lower 19,301.44. While at 06:00 GMT, while at 6:00GMT, the FxWirePro's Hourly Yen Strength Index remained neutral at 52.19 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex