JGBs lose ground after BoJ delivers unchanged decision, revises higher GDP forecasts

The Japanese government lost ground Thursday after the Bank of Japan (BoJ) delivered along the line of market expectations, keeping its monetary policy unchanged at the two-day meeting that concluded early today. The Bank has also revised its real gross domestic forecasts (GDP) higher at the meeting for the upcoming few fiscals.

The benchmark 10-year bond yield, which moves inversely to its price, remained tad higher at 0.07 percent, the long-term 30-year bond yields rose nearly 1 basis point to 0.87 percent and the yield on the short-term 2-year note traded flat at -0.10 percent by 04:00 GMT.

The BoJ maintained its short-term interest rate target at -0.1 percent and the 10-year JGB yield target around zero percent. Further, it also pushed back again the timing for achieving its 2 percent inflation target, with a pledge to buy JGBs so that its holdings increase at an annual pace of around JPY80 trillion.

The CB’s nine-member policy board also revised up its GDP forecast for FY2017-18, FY2018-19 and FY2019-20 to 1.8 percent, 1.4 percent and 0.7 percent, from 1.6 percent, 1.3 percent and 0.7 percent respectively.

Meanwhile, Japan’s Nikkei 225 traded 0.56 percent higher at 20,133.50, while at 04:00GMT and the FxWirePro's Hourly Yen Strength Index remained neutral at 6.34 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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