JGBs gain as November core CPI disappoints; investors cover previous shot positions

The Japanese government bonds gained on the last trading day of the week Friday as investors covered previous short positions on the back of disappointing consumer price inflation (CPI) data for the month of November.

The yield on the benchmark 10-year JGB note, which moves inversely to its price, fell to 0.025 percent, the yield on the long-term 30-year note also slumped to 0.720 percent and the yield on short-term 2-year also traded lower at -0.150 percent by 05:40GMT.

On Wednesday, U.S. Treasury yields fell to more than eight-month lows after the Federal Reserve lowered projections for rate hikes next year and Fed Chair Jerome Powell said that balance sheet reduction is on autopilot.

According to a report from Reuters, global stocks were sinking in a sea of red on Friday as the threat of a U.S. government shutdown and of further hikes in U.S. borrowing costs sent dismayed investors sailing for safer harbours. The S&P 500 was heading for its worst quarter since the dark days of late 2008, with a loss of 15 percent so far. The Nasdaq has shed 19.5 percent from its August peak, just shy of confirming a bear market. Oil prices slid just over 4 percent overnight, bringing Brent's losses since its October top to 37 percent. The dollar had suffered its biggest one-day drop on the yen since November 2017 as investors stampeded to safe havens.

Meanwhile, the Nikkei 225 index slumped 1.25 percent to 20,138.50 by 05:45GMT, while at 05:00GMT, the FxWirePro's Hourly JPY Strength Index remained neutral at 72.04 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex