JGBs jump at close following weakness in U.S. economic data amid trade clashes with Europe

The Japanese government bonds jumped at the time of closing Thursday following weakness in the Unites States’ economic data released yesterday, amid fresh tensions of a trade tussle with Europe, sparking demand for safe-haven assets.

At close, the yield on the benchmark 10-year JGB note, which moves inversely to its price, slumped 2 basis points to -0.190 percent, the yield on the long-term 30-year suffered 2-1/2 basis points to 0.365 percent and the yield on short-term 2-year slipped 1-1/2 basis points to -0.325 percent.

Not only did the ADP payrolls print come in lower than expected for September, at 135k, the previous month’s print was also revised down significantly from 195k to 157k. In particular, hiring at small businesses showed weak momentum, suggesting poor confidence in the corner of the economy that has traditionally been the most important for net jobs creation, OCBC Treasury Research.

Further, the WTO gave the US green light to place tariffs on $7.5 billion worth of European goods in retaliation to the bloc’s protectionism practices with regards to Airbus. The EU threatened to retaliate to any US move, the report added.

Meanwhile, the Nikkei 225 index slumped over 2 percent to 21,341.74.