Japanese bonds traded mixed Friday following the volatile benchmark stock index Nikkei. In addition, soft Bank of Japan’s bond buying pushed the prices little lower.
The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 1/2 basis points to 0.034 percent, the yield on long-term 40-year dipped 1-1/2 basis points to 0.951 percent and the yield on short-term 2-year up over 1/2 basis point to -0.186 percent by 03:45 GMT.
The Bank of Japan in its daily market operation, bought 41 billion of bonds maturing in 5 to 10 years (similar to what it bought on Wednesday), 20 billion of 10 to 25 years note and 10 billion of over 25 years of maturity.
In the United States, Treasuries saw a mixed performance overnight as modest buying in the short-end was contrasted by downward pressure further out the curve. Overall, the big news of the day was the Senate version of proposed tax reform, highlighted by a delay in the corporate tax rate cut to 20 percent (from 35 percent) until 2019.
On Thursday, the Ministry of Finance offered 800 billion yen of 30-year JGBs with a 0.80 percent coupon, with 3.4180 percent of the bids accepted at the lowest price of 100.0685. The sale drew bids of 3.43 times the amount offered, indicating decent demand but was still down from the previous sale's bid-to-cover ratio of 3.98, Reuters reported.
Meanwhile, Japan’s Nikkei 225 fell 1.14 percent to 22,609 at 03:55 GMT, while at 03:00GMT, the FxWirePro's Hourly Yen Strength Index remained neutral at -102.38 (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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