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Japanese bonds slump as investors square off positions ahead of long weekend

The Japanese government bonds traded lower on Friday as traders seen squaring their positions ahead of a long holiday weekend. Also, improving risk-taking appetite discouraged traders from safe-haven buying.

The yield on the benchmark 10-year bonds, which moves inversely to its price rose 4 basis points to -0.223 percent, yield on super-long 30-year note bounced 5 basis points to 0.188 percent and the short-term 2-year JGB yield jumped more than 2-1/2 basis points to -0.326 percent by 06:40 GMT.

Moreover, expectations of new stimulus in Japan from the government to revive economy lowered demand for safe-haven assets. The Japan's upper house election over the weekend concluded with a win for Prime Minister Shinzō Abe and his coalition partners.

The Japanese PM Abe also confirmed that he will instruct economy minister Nobuteru Ishihara to compile economy stimulus package and ask to implement economic measures to support domestic demand.

Meanwhile, the benchmark Nikkei 225 index closed up +0.68 percent at 16,497.85, and the broader Topix index closed 0.45 percent higher to 1,317.10 points.

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