JGBs remain modestly higher following recovery in buying at 30-year auction

The Japanese government bonds traded modestly higher Thursday after a considerable amount of buying was observed at the super-long 30-year auction conducted by Japan’s Ministry of Finance (MoF) earlier today.

The benchmark 10-year bond yield, which moves inversely to its price, fell nearly 1 basis point to 0.09 percent, while the long-term 20-year bond yields skid slightly over 1 basis point to 0.70 percent and the yield on the short-term 3-year note slipped to -0.14 percent by 06:30 GMT.

The central bank on Wednesday purchased JGBs Wednesday having residual maturity of 1-3 years worth JPY4.002 billion, maturity of 3-5 years worth JPY4.204 billion, maturity of 5-10 years worth JPY4.510 billion and inflation-indexed bonds worth JPY251 million.

Also, the central bank revised up its estimate of Japan’s real gross domestic product (GDP) to +1.5 percent for FY2017/18, compared to +1.3 percent projected in November, for FY2018/19 at +1.1 percent, against the +0.9 percent projected in November.

Lastly, markets will now focus on the fourth quarter gross domestic product (GDP), scheduled to be released on February 13 amid a silent trading session next week.

Meanwhile, Japan’s Nikkei 225 closed 0.53 percent lower at 18,907.67, while at 6:00GMT, the FxWirePro's Hourly Yen Strength Index remained slightly bullish at 81.97 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex