JGBs trade mixed in subdued session; markets await BoJ’s monetary policy decision

The Japanese government bonds remained narrowly mixed during Asian session Tuesday as investors refrained from any major trading activity amid lack of economically significant data. Also, bond prices received a setback earlier today, weighed down by strength in Japan’s benchmark Nikkei 225 stock index and weakness in the U.S. Treasuries.

Investors now shall be looking forward to the Bank of Japan’s (BoJ) two-day monetary policy decision, scheduled to be unveiled on April 27 for detailed direction in asset prices.

The yield on the benchmark 10-year JGBs, which moves inversely to its price, hovered around 0.05 percent, the yield on the long-term 30-year note rose 1 basis point to 0.75 percent and the yield on short-term 2-year traded 1 basis point lower at -0.13 percent by 04:55 GMT.

In addition, the 2-year JGB auction, amounting to JPY2.1 trillion or USD19.3 billion, held Tuesday managed to attract sufficient investor demand despite sluggishness in the debt market; The bid-to-cover ratio, a gauge of demand, at the two-year auction rose to 5.39 from 4.65 at the previous sale in March.

Lastly, market participants expect that the BoJ would stick to its negative interest rate policy for the foreseeable future.

Meanwhile, the Nikkei 225 index rose 0.77 percent to trade at 22,259.50 by 05:05 GMT, while at 05:00GMT, the FxWirePro's Hourly JPY Strength Index remained neutral at -49.06 (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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