JGBs nearly flat in subdued trade; 30-year auction in focus

Japanese government bonds traded nearly flat on Tuesday as investors remained sidelined in any major trading activity amid a silent session that witnessed no data of major economic importance.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, traded flat at 0.073 percent, the yield on the long-term new 40-year note dipped 1/2 basis point to 0.992 percent and the yield on short-term 2-year remained steady at -0.133 percent by 04:00 GMT.

On Monday, Bank of Japan Governor Haruhiko Kuroda reiterated the central bank’s resolve to maintain quantitative easing, but his positive comments on inflation and the economy sent the yen to a four-month high versus the dollar. Following this release, the USD/JPY fell 0.30%, currently trading at 110.94.

Kuroda also added that the BoJ will continue its aggressive easing, composed of yield curve control and a massive asset-buying program, for as long as needed to achieve its price target.

Looking ahead, Markets will now focus on the 30-year bond auction, which is scheduled to held on Thursday at 03:45GMT. Yield fluctuations should be monitored closely at the action as it an indicator of the government debt situation.

Meanwhile, the Nikkei 225 index traded 0.78 percent higher at 23,900.00 by 04:10 GMT, while at 04:00GMT, the FxWirePro's Hourly JPY Strength Index remained neutral at -21.34 (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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