Japanese government bonds traded tad lower Tuesday after the country showcased an upbeat set of economic data, including the consumer price-led inflation index, the unemployment rate, and household spending. Japan’s households spent more than expected in November while consumer inflation ticked up and the jobless rate hit a fresh 24-year low, offering the central bank some hope an economic recovery will drive up inflation to its 2 percent target.
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 new long-term 40-year climbed nearly 1 basis point to 0.98 percent and the yield on short-term 2-year traded 1/2 basis point higher at -0.13 percent by 04:50 GMT.
The nationwide core consumer price index (CPI), which includes oil goods but excludes volatile fresh food prices, rose 0.9 percent in November from a year earlier, government data showed on Tuesday, marking the 11th straight month of gains. The pace of price growth was just ahead of October’s 0.8 percent and a median market forecast of the same rate.
Japan's unemployment rate fell to a 24-year low in November as companies were increasingly short on labor while frugal consumers stepped up spending more than expected, government data showed Tuesday in the latest indication of a strengthening economy.
Further, minutes of the BoJ’s October rate review showed that while most central bank policymakers saw no need to ramp up stimulus, they agreed on the need to sustain “powerful” monetary easing for the time being.
Lastly, Japanese household spending rose 1.7 percent in November from a year earlier in price-adjusted real terms, government data showed on Tuesday that compared with economists’ median forecast for a 0.5 percent increase.
Meanwhile, Japan’s Nikkei 225 traded flat at 22,939.18 by 04:55, while at 04:00GMT, the FxWirePro's Hourly Yen Strength Index remained neutral at -8.15 (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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