Japanese bonds tad lower on hopes of improvement in June trade balance, national core CPI

The Japanese government bonds remained tad lower Wednesday as investors hope to see an improvement in the country’s trade balance data for the month of June and national consumer price inflation data for the same period, scheduled to be released today and 19 by 23:50GMT and 23:30GMT respectively.

The yield on Japan’s benchmark 10-year bond, which moves inversely to its price, remained tad higher at 0.04 percent, the yield on the long-term 30-year hovered around 0.68 percent and the yield on short-term 2-year traded 1/2 basis point up at -0.12 percent by 05:15GMT.

Wall Street edged higher once again during overnight session Tuesday as investors took confidence from Fed Chairman Powell’s comment that the US is on track for years of steady growth, strong jobs and low inflation, while the latest US manufacturing and industrial production numbers surprised higher into June. On interest rates, Powell also commented that the strong growth and stable inflation are drivers that should keep the FOMC on track to gradually raise interest rates.

Elsewhere, the European Union and Japan reportedly signed a free trade agreement yesterday which cut or eliminates tariffs on nearly all goods, ranging from European exports such as cheese and wine, while Japanese automakers and electronic makers will face fewer barriers. This move is seen as a stark contrast against Donald Trump’s attempt at protectionism given that the EU-Japan agreement collectively accounts for almost a third of the global economy.

Meanwhile, the Nikkei 225 index traded 0.71 percent higher at 22,859.50 at 05:20, while at 05:00GMT, the FxWirePro's Hourly JPY Strength Index remained neutral at -58.71 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex