JGBs tad higher on safe-haven demand after North Korea fires ballistic missile over Japan

The Japanese government bonds traded tad higher early Tuesday following higher safe-haven demand after North Korea fired a ballistic missile from its capital Pyongyang that flew over Japan before plunging into the northern Pacific Ocean. According to officials, this was an aggressive test-flight over the territory of a close U.S. ally, sending a clear message of defiance.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell slightly to 0.01 percent, the yield on long-term 30-year also remained tad 1 basis point lower at 0.83 percent and the yield on short-term 2-year hovered around -0.15 percent by 03:10 GMT.

North Korea carried out one of its most provocative missile tests in recent years early Tuesday morning, hurling a ballistic missile directly over Japan that prompted the government in Tokyo to warn residents in its path to take cover.

American officials noted that if it was in fact launched from the outskirts of the capital, it may have been meant to complicate recent American threats to hit the North with pre-emptive strikes. That possibility was explicitly raised this month by several Trump administration officials, as a way of seeking to deter the North Koreans.

Meanwhile, Japan’s Nikkei 225 traded 0.64 percent lower at 19,324.50 by 03:20GMT, while at 03:00GMT, the FxWirePro's Hourly Yen Strength Index remained neutral at -67.82 (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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