As investors shift their attention to important economic data coming out later this week in the United States, Japanese government bond (JGB) yields declined on Tuesday, reflecting a modest decline in U.S. Treasuries.
Inching further away from a nine-and-a-half-year high reached ahead of Federal Reserve Chair Jerome Powell’s remarks at the Jackson Hole economic conference on Friday, the 10-year JGB yield dropped 1.5 basis points (bps) to 0.645%.
According to Takeshi Ishida, currency strategist at Resona Holdings, “there was nothing particularly new (at the Jackson Hole Symposium), so I expect the trend will probably be for Japanese yields to stabilise as long as yields overseas settle down.”
According to him, investors are currently waiting for new information on the job market and inflation in the United States.
Before the economic data releases that may offer more clarity on the interest rate trajectory this year and next, U.S. Treasury rates drifted slightly down during the course of the previous night and during Asian trading.
The highly anticipated non-farm payrolls data is scheduled on Friday, while figures on ADP national employment are due on Wednesday. The exceptionally tight labour market has been noted as something the Fed is actively monitoring for indications of softening.
Ishida continued, “I believe tomorrow’s ADP is something to be watchful of.
The yield on 20-year JGBs decreased by 1.5 bps to 1.370%, and the yield on 30-year JGBs decreased by 1.5 bps to 1.650%.
Following Tuesday’s bond auction by the Ministry of Finance (MOF), the yield on two-year JGBs remained unchanged at 0.000%.
The MOF sold two-year JGBs for around 2,343 billion yen ($16.01 billion) at an average yield of 0.011 percent, with a yield of 0.02% for the lowest accepted price.
The five-year yield decreased by 0.5 basis points to 0.225%, up from the session’s earlier two-week low of 0.220%.