JGBs trade lower on firm crude oil prices; consumer inflation data in focus

The Japanese government bonds traded lower Thursday as crude oil futures rose sharply after the OPEC producers' group surprised the market with a deal to slash output. Also, firmer equity index moved away investors from safe-haven buying.

The benchmark 10-year bond yield, which moves inversely to its price, rose 1-1/2 basis points to -0.074 percent, the yield on long-term 30-year note climbed 1/2 basis point to 0.467 percent and the yield on short-term 2-year note bounced nearly 1 basis point to -0.285 percent by 06:10 GMT.

The JGBs have been closely following developments in oil markets because of their impact on inflation expectations, which are well below the Bank of Japan's target. Crude oil prices climbed nearly 6 percent after OPEC confirmed that the group has struck a deal to lower crude output at its policy meeting in November.

This is the first agreement to cut production since the market crashed in 2014 on supply glut. The International benchmark Brent futures rose 4 percent to $49.06 and West Texas Intermediate (WTI) also bounced 4 percent to $47 from the yesterday’s closing session.

Lastly, investors will remain keen to focus on the series of upcoming economic data, highlighted by household spending, National CPI, unemployment rate, industrial production and BoJ’s own inflation numbers, followed by central bank Governor Kuroda’s speech.

Meanwhile, the benchmark Nikkei 225 closed up 1.39 percent at 16,693.71 and the broader Topix index closed 0.94 percent higher to 1,343.25 points.