JGBs tad higher despite slight pick-up in national core CPI; BoJ’s Kuroda unlikely to be contended

The Japanese government bonds remained tad higher Friday as investors had largely shrugged-off the improvement in the country’s national core consumer price inflation data for the month of June, although the non-core CPI remained unchanged, missing market expectations as well.

The yield on Japan’s benchmark 10-year bond, which moves inversely to its price, slipped 1 basis point to 0.03 percent, the yield on the long-term 30-year hovered around 0.68 percent and the yield on short-term 2-year remained tad lower at -0.12 percent by 05:00GMT.

The nationwide core consumer price index (CPI), which includes oil products but excludes volatile fresh food prices, rose 0.8 percent in June from a year earlier, matching a median market forecast. It followed a 0.7 percent increase in May.

The so-called core-core inflation index, a more closely watched gauge the BOJ uses to strip away the effect of energy and fresh food costs, was up 0.2 percent in June, government data showed on Friday. That was a slowdown from the previous month's 0.3 percent gain.

According to a Reuters poll released last Friday, more than 40 percent of Japanese businesses believe it will take more than three years to reach the Bank of Japan’s (BoJ) inflation goal of 2 percent and more than a quarter think the goal is an impossible objective.

Meanwhile, the Nikkei 225 index traded 0.63 percent lower at 22,625.50 at 05:15, while at 05:00GMT, the FxWirePro's Hourly JPY Strength Index remained highly bullish at 131.23 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex