Japanese government bonds slumped Tuesday as investors have largely shrugged-off the set of lower-than-expected economic data, out this morning that offset the rise in retail sales and job-to-applicant ratio figures. Investors will now remain focused to watch the 10-year auction, scheduled to be held on February 1 for further direction in the debt market.
The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose nearly 1-1/2 basis points to 0.09 percent, the yield on the long-term 30-year note also climbed close to 1-1/2 basis points to 0.82 percent and the yield on short-term 2-year traded nearly flat at -0.12 percent by 05:30 GMT.
Retail sales in Japan were up a seasonally adjusted 0.9 percent on month in December, the Ministry of Economy, Trade, and Industry said on Tuesday, beating forecasts for a decline of 0.4 percent following the 1.8 percent gain in November. On a yearly basis, retail sales jumped 3.6 percent, also exceeding expectations of 2.2 percent and up from 2.1 percent in the previous month.
In contrast, the country’s average of household spending in Japan dipped 0.1 percent on year in December, the Ministry of Internal Affairs and Communications said on Tuesday, coming in at JPY322,157, shy of expectations for an increase of 1.3 percent following the 1.7 percent gain in November.
Meanwhile, the Nikkei 225 index slumped 1.38 percent to 23,296.00 by 04:50 GMT, while at 05:00GMT, the FxWirePro's Hourly JPY Strength Index remained highly bullish at 127.33 (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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