The Japanese government bonds snapped rally Wednesday after the Bank of Japan skipped short-term bond buying in its daily market operations (OMOs). Also, investors are eyeing the release of December consumer price inflation on Friday.
The benchmark 10-year bond yield, which moves inversely to its price, edged up 2-1/2 basis points to 0.07 percent, while the long-term 30-year bond yields rose 2 basis points to 0.82 percent and the yield on the short-term 2-year note remained surged nearly 3 basis points to -0.22 percent by 06:40 GMT.
The BoJ didn’t announce its outright purchase operation for 1-to-5-year sector Wednesday after buying four times this month. The central bank purchased JGBs having residual maturity of more than 10-15 years worth JPY3.897 billion, maturity of over 25 years worth JPY2.38 billion.
Also, investors are curiously eyeing the release of December consumer price inflation data, scheduled for Friday, besides, the Bank of Japan’s (BoJ) first 2-day monetary policy meeting 2017, scheduled to be held on January 31.
Lastly, we foresee that the central bank will remain committed to hold its 10-year JGB yields near zero, while keeping interest rate steady at -0.10 percent.
Meanwhile, Japan’s Nikkei 225 closed 1.45 percent higher at 19,061 while at 6:00GMT, the FxWirePro's Hourly Yen Strength Index remained neutral at 33.99 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex
