JGBs remain flat in muted trading session ahead of December retail sales, industrial production data

The Japanese government bonds remained flat on the first trading day of the week Monday amid a muted session that witnessed data of little economic significance. Investors will now be eyeing the country’s retail sales and industrial production data for the month of December, scheduled to be released on January 29 and 30 by 23:50GMT respectively.

The yield on the benchmark 10-year JGB note, which moves inversely to its price, remained flat at -0.001 percent, the yield on the long-term 30-year note hovered around 0.656 percent while the yield on short-term 2-year plunged 16 basis points to -0.163 percent by 05:30GMT.

Wall Street closed higher on Friday amid more positive earnings results and market hopes that the Fed would end its balance sheet unwinding earlier than expected. US president Trump also conceded to re-open the US government (which has been shut for a record 35 days) until February 15 without any guarantee for his wall funding, albeit he warned that “if we don’t get a fair deal from Congress the government will either shut down on Feb 15 again or I will use the powers afforded to me under the laws and the Constitution of the United States to address this emergency”, OCBC Treasury Research reported.

The US treasury bond market retreated, with the 10-year yield ending higher at 2.75 percent, despite the WSJ report on the Fed potentially holding a larger balance sheet than initially expected.

Meanwhile, the Nikkei 225 index closed 0.65 percent lower at 20,639.50 by 05:35GMT, while at 05:00GMT, the FxWirePro's Hourly JPY Strength Index remained slightly bearish at -85.83 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex