JGBs narrowly mixed on disparate economic data; Q4 GDP in focus next week

The Japanese government bonds traded narrowly mixed Friday, tracking disparate economic data that confused market movements. While the rise in core inflation and fall in the jobless rate improved investor sentiments, the dip in household spending and confidence added to the woes.

The benchmark 10-year bond yield, which moves inversely to its price, fell 1/2 basis point to 0.08 percent, the long-term 30-year bond yields trade flat at to 0.87 percent while the yield on the short-term 2-year note traded 1 basis point higher at -0.27 percent by 05:30 GMT.

Nationwide consumer prices in Japan were up 0.4 percent on year in January, data released by the Ministry of Internal Affairs and Communications showed Friday. That was in line with expectations and up from 0.3 percent in December.

Further, core CPI, which excludes fresh food costs, added 0.1 percent on year - topping forecasts for a flat reading following the 0.2 percent decline in the previous month. On a monthly basis, overall inflation added 0.1 percent and core CPI was up 0.3 percent.

In addition, the unemployment rate in Japan came in at a seasonally adjusted 3.0 percent in January, in line with expectations and down from 3.1 percent in December. In contrast, household spending in Japan was down 1.2 percent on year in January, missing forecasts for a decline of 0.3 percent on year.

Meanwhile, Japan’s Nikkei 225 fell 0.77 percent to 19,415 at 05:40GMT, while at 05:00GMT, the FxWirePro's Hourly Yen Strength Index remained highly bearish at -141.43 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex