JGBs trade nearly flat ahead of 20-year auction, Fed’s policy decision

Japanese government bonds traded nearly flat on Tuesday as investors awaited the 1.0 trillion yen 20-year JGBs auction scheduled for Thursday along with FOMC last policy decision for this year.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, trade nearly flat at 0.051 percent, the yield on long-term 40-year remained steady at 0.979 percent and the yield on short-term 2-year rose a nearly ½ basis point to -0.143 percent by 03:00 GMT.

In the United States, the Treasury curve saw mixed performance overnight as modest selling in the short-end was contrasted by greater upward pressure further out the curve, during a relatively quiet session light on data of great significance.

Markets continue to await the December FOMC statement on Wednesday, largely expected to deliver another 25 basis points rate hike but guidance to be more muted, given the ongoing changes at the top of the FOMC ladder. In the more immediate-term markets await producer prices and Treasury budget statement data on Tuesday, accompanied by a 30-year bond auction in the afternoon.

Lastly, the market will also look forward to the October’s industrial production and Q4 Tankan large manufacturer’s index.

Meanwhile, the Nikkei 225 traded 0.07 percent higher at 22,955 by 03:00 GMT, while at 04:00GMT, the FxWirePro's Hourly JPY Strength Index remained neutral at 50.43 (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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