JGBs remain flat in muted trading session; 20-year bond auction captures weak demand

The Japanese 10-year government bonds remained flat Wednesday as investors trade sideways in a muted week that witnessed data of little economic significance. Also, the 20-year bond auction yesterday failed to attract much demand, leading to a fall in debt prices.

The yield on Japan’s benchmark 10-year bond, which moves inversely to its price, remained flat at 0.03 percent, the yield on the long-term 30-year also remained steady at 0.71 percent and the yield on short-term 2-year traded tad higher at -0.12 percent by 05:00GMT.

Bond prices remained tilted to the downside after an auction of one trillion yen 20-year bonds attracted tepid demand, producing one of the weakest results. The auction’s tail, or the gap between the lowest and average prices, was 0.08, much larger than 0.02 in the previous auction and the average over the past 12 months of around 0.04.

Demand was limited as yield stayed near 0.50 percent, just above this year’s low of 0.495 percent marked in April.

Meanwhile, the Nikkei 225 index traded 0.02 percent lower at 22,336.50 by 04:55 GMT, while at 05:00GMT, the FxWirePro's Hourly JPY Strength Index remained neutral at -39.17 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex