JGBs slump after reading improved February consumer inflation, lower unemployment rate

The Japanese government bonds slumped on the last trading day of the week, after reading the improvement in the country’s consumer price inflation during the month of February. Also, the fall in Japan’s rate of unemployment during last month, added to the fall.

The benchmark 10-year bond yield, which moves inversely to its price, rose nearly 1 basis point to 0.07 percent, the long-term 30-year bond yields jumped 1-1/2 basis points to 0.84 percent and the yield on the short-term 3-year note traded 1 basis point higher at -0.18 percent by 05:50 GMT.

Japan’s core consumer prices rose slightly for a second month in February, while the jobless rate dropped to the lowest level since 1994. Consumer prices excluding fresh food climbed 0.2 percent in February from a year earlier (forecast 0.2 percent), registering the first back-to-back gains since late 2015.

However, household spending declined 3.8 percent in February (forecast -1.7 percent), while the unemployment rate was 2.8 percent (forecast 3 percent) in February. Further, industrial production rose 2.0 percent in February from the previous month (forecast 1.2 percent).

Meanwhile, Japan’s Nikkei 225 closed 0.75 percent lower at 18,920, while at 06:00GMT, the FxWirePro's Hourly Yen Strength Index remained neutral at -24.32 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex