JGBs jump tracking U.S. Treasuries after slight rise in February CPI; BoJ’s policy decision in focus

The Japanese government bonds jumped tracking a similar movement in the United States Treasuries during overnight session, following a slight rise in the latter’s consumer price index (CPI) for the month of February.

However, market participants will be awaiting the Bank of Japan’s (BoJ) 2-day monetary policy meeting, which is due to be concluded on March 15 for further direction in the debt market.

The yield on the benchmark 10-year JGB note, which moves inversely to its price, slumped nearly 4-1/2 basis points to -0.043 percent, the yield on the long-term 30-year edged nearly 1-1/2 basis points lower at 0.579 percent and the yield on short-term 2-year plunged 15-1/2 basis points to -0.154 percent by 06:20GMT.

The U.S. Department of Labour reported that the country’s February CPI rose for the first time in four months but the pace of the increase was modest, resulting in the smallest annual gain in nearly 2-1/2 years.

Prices increased 0.2 percent, lifted by gains in the costs of food, gasoline and rents. The CPI had been unchanged for three straight months. In the 12 months through February, the CPI rose 1.5 percent, the smallest gain since September 2016. The CPI increased 1.6 percent on a year-on-year basis in January.

Further, a report from CNBC noted, "The Treasury Department auctioned $24 billion in 10-year notes at a high yield of 2.615 percent. The bid-to-cover ratio, an indicator of demand, was 2.59. Indirect bidders, which include major central banks, were awarded 69.4 percent. Direct bidders, which includes domestic money managers, bought 9.1 percent."

Meanwhile, the Nikkei 225 index closed 1.03 percent lower at 21,281.50, while at 06:00GMT, the FxWirePro's Hourly JPY Strength Index remained slightly bullish at -147.73 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex