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Japanese bonds gain following German bunds, U.S. Treasuries

The Japanese government bonds gained Friday following the prices of German bunds and United States Treasuries. Also, investors poured into safe-haven instruments amid losses in riskier assets including equities and crude oil.

The benchmark 10-year bond yield, which moves inversely to its price, fell 2-1/2 basis points to -0.047 percent, the super-long 30-year note yield dipped 4 basis points to 0.475 percent by 07:00 GMT.

The global bond prices bounced after the Federal Open Market Committee left fed funds rate unchanged in a 0.25-0.50 percent range, in line with market expectations. One key highlight of the statement was the note that near-term risks to the economic outlook appear roughly balanced. However, the Committee continues to closely monitor inflation indicators and global economic and financial developments.

Moreover, the updated individual Fed forecasts for 2016 revealed GDP lower at 1.7 percent to 1.9 percent, from previous forecast of 1.9 percent to 2.0 percent, unemployment rate at 4.7 percent to 4.9 percent, from 4.6 percent to 4.8 percent and PCE inflation at 1.2 percent to 1.4 percent, from previous estimates of 1.3 percent to 1.7 percent.

Longer-term inflation expectations kept unchanged at 2.0 percent, alongside longer-run unemployment at 4.7 percent to 5.0 percent. Overall, the median forecast for the midpoint of the target rate/range is around 0.625 percent by the end of 2016, down from 0.875 percent and 1.125 percent by the end of 2017, down from 1.625 percent.

Meanwhile, the benchmark Nikkei 225 closed down 0.32 percent at 16,754.02 and the broader Topix index closed 0.23 percent lower to 1,349.56 points.

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