JGB yields plummet in line with global counterparts on anxiety before Trump-Xi meeting

The Japanese government bond yields plummeted at close on the last trading day of the week Friday as investors grew anxious and nervous before the United States President Donald Trump and Chinese counterpart Xi Jinping are set to meet at the G-20 Summit in Osaka, Japan, starting today, to discuss on a trade truce.

At close, the yield on the benchmark 10-year JGB note, which moves inversely to its price, plunged 19 basis points to -0.159 percent, the yield on the long-term 30-year nose-dived 21 basis points to 0.369 percent and the yield on short-term 2-year slumped 8 basis points to -0.218 percent.

According to a report from Scotiabank, jointly citing, South China Morning Post and Politico, the US and China have tentatively agreed to another truce in their trade war in order to resume talks aimed at resolving the dispute, citing sources familiar with the situation.

Also, according to the article, President Trump’s decision to delay additional tariffs on the remaining USD300 billion of Chinese products is China’s precondition for holding the Trump-Xi Osaka Summit.

The article also said that "It is unclear whether Trump will give any sort of deadline for the talks to reach an agreement, as he had before. Two sources suggested a deadline of six months, which would put the deadline at the end of the year."

In addition, Trump, on early Thursday, when interviewed by Fox Business, said that the U.S. would definitely consider imposing additional tariffs on Chinese goods if the two countries fail to reach a trade agreement; however, the rate of tariff would start at 10 percent, rather than earlier prescribed 25 percent.

However, White House economic adviser Larry Kudlow confirmed to the same news channel that there have been no specific agreements between the two leaders and that Trump would stick to insist on structural changes in China’s policies to protect American intellectual property.

Meanwhile, the Nikkei 225 index closed tad -0.29 percent lower at 21,275.92, while at 06:00GMT, the FxWirePro's Hourly JPY Strength Index remained neutral at -52.16 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex