JGBs remain flat in muted trading; BoJ’s upbeat Tankan survey weighs on debt sentiment

The Japanese government bonds remained flat Tuesday as investors traded sideways in ma muted session amid lack of significant economic data. Also, the Bank of Japan’s (BoJ) upbeat Tankan survey indicated that the Japanese economy is on the verge of improvement, which further suppressed sentiments in safe haven bond market.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, hovered around 0.08 percent, the yield on long-term 30-year rose 1 basis point to 0.88 percent and the yield on short-term 2-year traded flat at -0.11 percent by 03:40 GMT.

Weighing on bond market sentiment, the Bank of Japan’s closely watched Tankan survey showed that big manufacturers have more confidence in business conditions than they have had for a decade as a weak yen and robust global demand add momentum to the economic recovery.

Further, the BoJ maintained the target amount for its government bond-buying programme at its regular market operations in October from September, the central bank’s bond-buying plan released on Friday showed, Reuters reported.

Meanwhile, Japan’s Nikkei 225 jumped nearly 1.00 percent to 20,594.50 by 03:45GMT, while at 03:00GMT, the FxWirePro's Hourly Yen Strength Index remained neutral at -46.60 (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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