JGBs edge lower as investors shift to riskier assets; March National CPI in focus

The Japanese government bonds edged lower Thursday as investors shifted to riskier assets including oil and equities. Investors are now awaiting Japan’s national consumer price inflation (CPI) data for the same period, due today by 23:30GMT.

The yield on the benchmark 10-year JGBs, which moves inversely to its price, rose 1/2 basis point to 0.04 percent, the yield on the long-term 30-year note also edged slightly higher to 0.70 percent and the yield on short-term 2-year traded 1 basis point higher at -0.13 percent by 05:15 GMT.

Japanese headline inflation is expected to have slowed in March. According to a DBS Bank research report, the consumer price inflation is likely to have eased to 1.1 percent year-on-year from 1.5 percent recorded in February and 1.3 percent in January. Meanwhile, core inflation is likely to have stayed stable and remain low at 0.5 percent.

Wall Street paused, while US Treasury bond yields climbed (with the 5-30 year curve flattening to just 29bps, the narrowest since 2007, and the 2-10 curve at 44 basis points) amid relatively upbeat corporate earnings and rising crude oil prices.

Lastly, US President Trump and Japanese PM Abe have agreed to work closely on bilateral trade and start talks on free, fair and reciprocal trade deals.

Meanwhile, the Nikkei 225 index rose 0.38 percent to trade at 22,242.90 by 05:20 GMT, while at 05:00GMT, the FxWirePro's Hourly JPY Strength Index remained highly bearish at -136.00 (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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