The Japanese government bonds gained at the time of Asian close Wednesday after investors’ risk sentiments took a bow following a global growth forecast downgrade by the International Monetary Fund (IMF) yesterday for this year, to 3.3 percent, lowest since 2009, from prior 3.5 percent.
The yield on the benchmark 10-year JGB note, which moves inversely to its price, slumped 6 basis points to -0.059 percent, the yield on the long-term 30-year slipped 1 basis point to 0.530 percent and the yield on short-term 2-year plunged 16-1/2 basis points to -0.165 percent by 06:00GMT.
Overnight, S&P500 closed lower amid growing concerns that US-EU trade relations will take a turn for the worse with the US plan to levy about US$11b of tariffs on European goods to retaliate on the Airbus issue, while UST bonds rallied with the 10-year yield at 2.5 percent.
EU leaders will now consider the duration of the next Brexit extension, with a preference for a flexible extension for up to a year yet allow for Brexit when an agreement is settled.
Lastly, the Bank of Japan offered to buy JPY480 billion ($4.32 billion) of five- to 10-year bonds in a regular debt-purchasing operation, providing support to the broader market.
Meanwhile, the Nikkei 225 index closed 0.56 percent lower at 21,681.50, while at 06:00GMT, the FxWirePro's Hourly JPY Strength Index remained highly bullish at 148.19 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex