JGBs flat after January monetary policy meeting minutes hint at powerful easing, political worries continue to hover

Japanese government bonds remained flat Wednesday after Bank of Japan (BoJ) Governor Haruhiko Kuroda voiced his opinion in favor of the central bank’s smooth exit from its ultra-loose monetary policy, but said it was too early to debate specifics with inflation still distant from its target. However, political disturbances still continue to hover around, dragging more investors into safe-haven assets.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, hovered around 0.05 percent, the yield on the long-term 30-year note remained steady at 0.75 percent and the yield on short-term 2-year traded 1/2 basis point higher at -0.14 percent by 05:40 GMT.

BoJ Governor Haruhiko Kuroda said that the central bank could learn from how other major central banks, such as the U.S. Federal Reserve, are whittling down stimulus for when it eventually exits easy policy.

The remarks came after minutes released earlier on Wednesday showed some BOJ policymakers called for greater scrutiny on the potential drawbacks of massive monetary stimulus and signaled the possibility of a future interest rate hike.

Meanwhile, the Nikkei 225 index traded 1.16 percent higher at 21,718.50 by 05:45 GMT, while at 05:00GMT, the FxWirePro's Hourly JPY Strength Index remained slightly bearish at -78.86 (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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