JGB yields slide in step with US peers; jobs report in focus
By Brigid Riley
TOKYO, Sept 4 (Reuters) - Japanese government bond yields declined on Wednesday as U.S. Treasury yields fell, while investors weighed the outlook for the world's largest economy ahead of Friday's non-farm payrolls.
The benchmark 10-year JGB yield JP10YTN=JBTC was down 3.5 basis points at 0.885% as of 0430 GMT, reversing its rise over the previous two days, while 10-year JGB futures 2JGBv1 rose 0.38 yen to 144.79 yen.
U.S. Treasury yields fell on Tuesday after data signalled activity in the manufacturing sector remains soft. The 10-year Treasury yield US10YT=RR was at 3.83% in Asia trading hours on Wednesday.
The Institute for Supply Management said its manufacturing PMI rose to 47.2 in August, up from an eight-month low of 46.8 in July. But the reading remained below 50 for the fifth straight month, indicating a contraction.
Global markets remain sensitive to U.S. growth indicators, after a weak jobs report last month sparked market stress over imminent recession risks.
A U.S. recession would have global impact, leaving investors waiting for more clarity on its outlook.
"Given the current uncertainty about the future, it's unclear whether Japan's additional interest rate hikes will proceed smoothly," said Makoto Suzuki, senior bond strategist at Okasan Securities.
Confidence that the U.S. economy is heading for a soft landing could generate more speculation in the bond market about the Bank of Japan's next rate hike, which most economistsand market players believe will come in either December or January, he said.
For now though, it's hard to trade in either direction, Suzuki said.
The biggest test this week will come on Friday when U.S. non-farm payrolls for August will be released.
Elsewhere on the curve, the 20-year JGB yield JP20YTN=JBTC and 30-year JGB yield JP30YTN=JBTC both slid 3.5 bps to 1.69% and 2.06%, respectively.
On the short end, the two-year JGB yield JP2YTN=JBTC ticked down 1 bps to 0.375%, while the five-year yield JP5YTN=JBTC fell 2.5 bps to 0.505%.
Reporting by Brigid Riley; Editing by Varun H K
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
