JGBs remain flat ahead of 30-year auction, Q1 GDP

The Japanese government bonds traded flat as investors wait to watch the country’s 30-year auction, scheduled to be held on June 6 amid expectations of a rise in the Japan’s gross domestic product (GDP) for the first quarter of this year, due for release on June 7.

The benchmark 10-year bond yield, which moves inversely to its price, traded flat at 0.05 percent, the long-term 30-year bond yields also hovered around 0.80 percent while the yield on the short-term 2-year note traded tad lower at -0.14 percent by 06:30 GMT.

Japan’s economy is expected to have expanded more quickly in the first quarter than initially estimated, buoyed by gains in corporate capital spending, a Reuters poll showed on Friday. Economic growth is seen at an annualised 2.4 percent in the first quarter, revised up from a preliminary estimate of 2.2 percent, the median forecast of 18 analysts by Reuters showed.

Lastly, Japan’s April current account data is also due next week and is expected to show the surplus shrinking due in part to a narrowing trade surplus. The poll’s median forecast put Japan’s April current account surplus at JPY1.6988 trillion (USD15.22 billion), from JPY2.9 trillion in March.

Meanwhile, Japan’s Nikkei 225 closed 0.03 percent lower at 20,170.82, while at 06:00GMT, the FxWirePro's Hourly Yen Strength Index remained neutral at -36.40 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex