JGBs rangebound ahead of a Cabinet re-shuffling, summer holiday

The Japanese government bonds remained range-bound Wednesday in the light of no important economic data or events ahead of a Cabinet reshuffling by Prime Minister Shinzo Abe on August 3. Also, traders refrained from engaging in any major activity on account of upcoming summer holiday.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, hovered around 0.07 percent, the yield on long-term 30-year note flat at 1.09 percent and the yield on short-term 2-year too traded steady at -0.11 percent by 04:10 GMT.

According to a report from Reuters, Japan PM Abe held talks with coalition partner Komeito party leader Yamaguchi on a cabinet reshuffle which would take place as early as August 3. Yamaguchi later told reporters that he hopes the reshuffle will help the Abe administration's approval ratings recover.

Further, the 10-year auction, held Tuesday went well, stopping at 0.074 percent, in line with secondary prices before the auction. The bid-to-cover ratio declined to 4.21 from 4.77 previously, while the tail was unchanged at 0.1 basis point.

"I think the curve's steepening bias will maintain until Friday's US jobs data and next week's 30-year auction, but after those events, JGBs will likely be in real holiday mode. It is really difficult to make money from JGB trading," Nasdaq reported, citing one source at a Japanese trust bank.

Meanwhile, Japan’s Nikkei 225 rose 0.58 percent to 20,104.50 by 04:10GMT, while at 04:00GMT, the FxWirePro's Hourly Yen Strength Index remained neutral at 59.07 (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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