JGBs flat after February household spending misses expectations, wages data cheers investors

The Japanese government bonds suffered Thursday even as investors expect to see a fall in the country’s household spending for the month of February, scheduled to be released today by 23:30GMT. It is seen to come in at 0.3 percent y/y, from 2.0 percent y/y in January and at -0.36 percent y/y, from prior 2.7 percent y/y.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, hovered around 0.04 percent, the yield on the long-term 30-year note jumped 1 basis point to 0.74 percent and the yield on short-term 2-year held steady at -0.13 percent by 05:15 GMT.

Japan’s household spending shrank 0.9 percent in February from a year earlier, the biggest drop since a 1.4 percent fall in April last year, while inflation-adjusted real wages fell for a third straight month in February, undercutting consumer buying power.

Part-time workers’ hourly pay rose 2.4 percent last year, much more than a 0.3 percent gain for regular workers’ wages, and grew 1.9 percent in February, the wage data showed. As the overall income of part-time workers remains low compared with that of permanent employees, the rise in their pay has not translated into stronger consumption, Reuters reported.

Meanwhile, the Nikkei 225 index traded 0.08 percent lower at 21,628.50 by 05:30 GMT, while at 05:00GMT, the FxWirePro's Hourly JPY Strength Index remained highly bearish at -144.22 (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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