JGBs tad lower on continued recovery in risk sentiments, Nikkei 225 surges nearly 1 pct

Japanese government bonds traded tad lower Thursday as stock prices rebounded after witnessing heavy sell-off as the country’s domestic stock index, Nikkei 225 was seen hovering higher at around 1 percent early in the session.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 1/2 basis point to 0.07 percent, the yield on the long-term 30-year note also traded tad higher at 0.82 percent and the yield on short-term 2-year remained flat at -0.14 percent by 04:50 GMT.

U.S. government debt yields rose Wednesday after a soft Treasury auction, back to the levels that coincided with Friday's stock market sell-off. Yields also rose on the back of a new budget compromise among congressional leaders.

After two major sell-offs on Friday and Monday, leading U.S. indexes saw sharp swings, with the Dow Jones industrial average starting Tuesday significantly lower, before rallying and closing up more than 550 points.

Further, the Treasury Department auctioned USD24 billion in 10-year notes at a high yield of 2.811 percent. The bid-to-cover ratio, an indicator of demand, was 2.34. Indirect bidders, which include major central banks, were awarded 67.5 percent. Direct bidders, which includes domestic money managers, bought 5.4 percent.

Meanwhile, the Nikkei 225 index traded nearly 1 percent higher at 21,831.00 by 04:55 GMT, while at 04:00GMT, the FxWirePro's Hourly JPY Strength Index remained highly bullish at 136.46 (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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