JGBs lower in Asian trade tracking U.S. counterpart ahead of July trade balance data

The Japanese government bonds traded lower in early Asian trading Wednesday, tracking similar overnight movement in the U.S. Treasuries and as investors wait to watch the country’s trade balance data for the month of July, scheduled to be released today by 23:50GMT.

traded flat Tuesday after the country’s industrial production for the month of June, released today, came in higher than what markets had initially anticipated.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 1/2 basis point to 0.04 percent, the yield on long-term 30-year note jumped nearly 2 basis points to 0.86 percent and the yield on short-term 2-year hovered around -0.11 percent by 04:00 GMT.

Japan's exports had risen for the seventh straight month in June led by shipments of cars and electronics, an indication external demand continues to support a gradual economic recovery and backing the central bank's upbeat economic view. Exports grew 9.7 percent y/y in June, versus a 9.5 percent annual gain expected by economists in a Reuters poll. It followed a 14.9 percent y/y rise in the previous month.

Lastly, Japan’s trade balance for July is expected to show up a surplus (adjusted trade balance) of around JPY0.19 trillion, compared to JPY0.08 trillion in June. While exports are seen to have risen 1.36 percent, from previous 9.7 percent, imports rose 17 percent, from 15.15 percent in June.

Meanwhile, Japan’s Nikkei 225 traded 0.03 percent higher at 19,759.00 by 04:10GMT, while at 04:00GMT, the FxWirePro's Hourly Yen Strength Index remained highly bearish at -126.13 (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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