JGBs Fall on Weaker Currency and Stronger Stock Market

Japanese government bonds plunged Thursday, pressured by the yen’s sharp drop and Tokyo stocks’ big rebound.

The lead December futures contract on 10-year JGBs finished down 0.2 point from Wednesday at 145.41 on the Osaka Exchange.

Volume grew to 44,729 contracts from 35,808.

In late interdealer trading in cash JGBs, the yield on the latest 335th 10-year issue with a 0.5 percent coupon stood at 0.57 percent, up from 0.555 percent late Wednesday.

Selling hit JGBs from the outset, following U.S. Treasuries’ drop overnight amid lingering concerns over an early interest rate hike by the Federal Reserve Board, whose officials released their higher Fed funds rate projections for next year after a two-day policy-setting Federal Open Market Committee meeting that ended Wednesday.

The market was also pulled back by the dollar’s advance to top ¥108.50 and the Nikkei stock average’s surge to break the 16,000 line.Speech

via Japan News

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza