JGBs remain flat in thin trading, investors eye Trump’s speech

The Japanese government bonds traded nearly flat Wednesday as investors remain sidelined in any big deal as major market participants are eyeing to focus on the United States President-elect Donald Trump’s speech later in the day for further guidance in the debt market.

We foresee that the bond prices will keep drifting between small gains and losses in quiet trading session.

The benchmark 10-year bond yield, which moves inversely to its price, hovered around 0.05 percent, the long-term 30-year bond yields stood flat at 0.75 percent and the yield on short-term 2-year note remained steady at -0.17 percent by 04:00 GMT.

Moreover, some amount of buying was observed along the short-term curve, barring the super-long as investors averted from riskier assets including equities and crude oil. Lastly, the BoJ’s first two-day monetary policy meeting for 2017 will take place on January 30-31. We foresee that the central will remain committed to holding its 10-year JGB yields near zero while keeping interest rate steady at -0.10 percent.

Meanwhile, the benchmark Nikkei 225 traded 0.38 percent higher at 19,375, while at 6:00GMT, the FxWirePro's Hourly Yen Strength Index remained highly bullish at 134.78 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex