JGBs lose ground after upbeat Tankan manufacturers’ index in Q3

The Japanese government bonds slumped after Reuters’ Tankan rose unexpectedly in Q3. This shows that the big manufacturers have more confidence in business conditions than they have had for a decade as global demand adds momentum to economic recovery.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, more than 1 basis point to 0.076 percent, the yield on long-term 30-year rose nearly 1 basis point to 0.88 percent and the yield on short-term 2-year traded 1/2 basis point higher at -0.11 percent by 04:55 GMT.

Big manufacturers have more confidence in Japan's business conditions than they have had for a decade as global demand adds momentum to economic recovery, a closely watched central bank survey showed on Monday.

The upbeat data supports Bank of Japan policymakers' hopes that a sustained economic recovery will boost wages and household spending, helping to accelerate inflation towards the central bank's ambitious 2 percent target.

The BoJ's quarterly "tankan" survey showed the headline index for big manufacturers' sentiment stood at plus 22 in September, handily exceeding a median market forecast of plus 18 to mark the highest level since September 2007. It was higher than plus 17 seen in the previous survey in June, posting a fourth straight quarter of improvement, the tankan survey showed on Monday.

Meanwhile, Japan’s Nikkei 225 traded 0.11 percent higher at 20,378.50 by 04:55GMT, while at 04:00GMT, the FxWirePro's Hourly Yen Strength Index remained neutral at -45.31 (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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