JGBs rise slightly as GDP growth slows in Q3; heavy BoJ bond buying

Japanese government bonds rose slightly Wednesday after gross domestic product (GDP) growth slows in the third-quarter, coupled with heavy bonds buying from the Bank of Japan in its daily market operations.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 1 basis point to 0.045 percent, the yield on long-term 40-year declined nearly 1 basis point to 0.987 percent and the yield on short-term 2-year declined 1 basis point to -0.184 percent by 04:05 GMT.

Japan notched up its seventh straight quarter of economic growth, official data showed on Wednesday, although the rate of expansion in the world's third-biggest economy is slowing. Japanese gross domestic product (GDP) grew by 0.3 percent in the third quarter of the year, marking the longest string of gains for more than 16 years.

However, the figure represented a slowdown from the second quarter, when the economy grew by 0.6 percent, as a recovery in private consumption appeared to lose steam. The economy grew by an annualized 1.4 percent, driven mainly by robust exports, the Cabinet Office in Tokyo announced.

Today, the BoJ in its daily market operation offered to buy 410 billion yen of JGBs maturing in 5 to 10 years, 300 billion yen of JGBs maturing in three to five years, and 280 billion yen below 3 years.

Meanwhile, Japan’s Nikkei 225 slumped 1.33 percent to 22,082.00 by 04:10, while at 04:00GMT, the FxWirePro's Hourly Yen Strength Index remained neutral at 37.68 (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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