JGBs mixed ahead of super-long 30-year auction, December household spending

The Japanese government bonds remained mixed during late Asian session Tuesday ahead of the country’s super-long 30-year bond auction, scheduled to be held on February 7 by 03:35GMT and the household spending data for the month of December, due for release on the same day by 23:30GMT.

The yield on the benchmark 10-year JGB note, which moves inversely to its price, fell 1-1/2 basis points to -0.014 percent, the yield on the long-term 30-year edged 1 basis point higher to 0.617 percent while the yield on short-term 2-year plunged 16-1/2 basis points to -0.164 percent by 05:30GMT.

The headline index from the survey – the seasonally adjusted Business Activity Index – rose in January to 51.6, from 51.0 in December, thereby indicating a stronger expansion in service sector business activity. Anecdotal evidence suggested that output was raised to accommodate for greater demand.

In contrast, production was scaled back by Japanese manufacturers, the first monthly drop in output in the sector since July 2016 and a notable turnaround from the solid expansion seen in December. As such, the Nikkei Composite Output Index fell to 50.9 in January, from 52.0 in December.

Meanwhile, the Nikkei 225 index slipped 0.22 percent to 20,832.50 by 05:35GMT, while at 05:00GMT, the FxWirePro's Hourly JPY Strength Index remained neutral at -43.22 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex