JGBs gain at close after Q2 GDP expands less than prior amid uncertainty over U.S.-China trade talks

The Japanese government bonds gained at close of morning Asian session Monday after the country’s gross domestic product (GDP) for the second quarter of this year expanded less than that in the previous quarter amid hovering uncertainties over U.S.-China trade talks.

At close, the yield on the benchmark 10-year JGB note, which moves inversely to its price, plunged 25 basis points to -0.254 percent, the yield on the long-term 30-year hovered around 0.198 percent and the yield on short-term 2-year slumped 31 basis points to -0.312 percent.

Global risk appetite received another booster shot on Friday as China’s PBOC cut RRR by 50bps effective September 16 and Fed Chair Jerome Powell reassured investors that an US recession was not forthcoming but did not shift expectations that the central bank was prepared to cut interest rates by 25bps at the upcoming FOMC meeting, OCBC Treasury Research reported.

"Asian markets may kickstart the week on a firmer trading tone this morning, aided by the PBOC’s RRR cuts but the test of the pudding will be if it will sustain amid the lacklustre US NFP and China trade data," the report further commented.

Meanwhile, the Nikkei 225 index closed 0.53 percent up at 21,312.50.