JGBs fall after August retail sales beats expectations, unemployment rate cheers investors

Japanese government bond prices fell on the last trading day of the week Friday after the country’s retail sales for the month of August beat market expectations and the unemployment rate also came in lower than previous, adding to gains in debt yields, as investors shifted away from safe-haven assets.

The yield on the benchmark 10-year JGB note, which moves inversely to its price, rose 1/2 basis point to 0.129 percent, the yield on the long-term 30-year note climbed nearly 1-1/2 basis points to 0.907 percent and the yield on short-term 2-year remained flat at -0.112 percent by 05:15GMT.

The value of retail sales in Japan was up a seasonally adjusted 0.9 percent on month in August, according to data released by the Ministry of Economy, Trade and Industry showed on Friday, beating forecasts for an increase of 0.5 percent and was up from 0.1 percent in July. On a yearly basis, retail sales jumped 2.7 percent - again exceeding expectations for 2.0 percent and up from 1.5 percent in the previous month.

Further, the country’s unemployment rate came in at a seasonally adjusted 2.4 percent in August, the Ministry of Internal Affairs and Communications said on Friday - beneath expectations for 2.5 percent, which would have been unchanged from the previous month. The job-to-applicant ratio was 1.63 - unchanged and matching forecasts. The number of employed persons in August 2018 was 66.82 million, an increase of 1.09 million or 1.7 percent on year, the data showed.

Meanwhile, the Nikkei 225 index jumped 1.34 percent to 24,136.00 by 05:20GMT, while at 05:00GMT, the FxWirePro's Hourly JPY Strength Index remained neutral at -2.71 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex