JGBs jump in silent trading session ahead of Fed monetary policy meeting

The Japanese government bonds jumped after the end of Asian session Tuesday amid a silent trading day that witnessed data of little economic significance. However, investors will keep a close eye on the Federal Reserve’s monetary policy meeting, scheduled for tomorrow for further direction in the debt market.

The yield on the benchmark 10-year JGB note, which moves inversely to its price, slumped 4 basis points to -0.042 percent, the yield on the long-term 30-year suffered 2 basis points to 0.563 percent and the yield on short-term 2-year too edged down to -0.161 percent by 06:50GMT.

It was only a modest increase on Wall Street overnight as energy stocks were supported by a rise in oil prices to a five month high. On Brexit, the pound fell as the House of Commons Speaker John Bercow has more or less banned the government from undertaking another Brexit vote unless there are significant changes to the deal, OCBC Treasury Research reported.

On the oil front, OPEC and its allies reaffirmed their commitment to output cuts but will decide in June instead whether to extend the curbs into the second half of 2019. Asian markets are likely to trade cautiously today as they still await statements and decisions from various central banks this week including the FOMC, BI, BSP and the BoT, the report added.   

Meanwhile, the Nikkei 225 index closed tad lower at 21,553.00, while at 06:00GMT, the FxWirePro's Hourly JPY Strength Index remained highly bullish at 110.91 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex