Economic news

JGBs Trade Flat ahead of FOMC, Shrug off BOJ Decision

TOKYO, Sept 22 (Reuters) - Japanese government bond yields were flat on Wednesday, with Treasuries also stable as investors awaited clues about the path of U.S. monetary policy.

The Federal Open Market Committee (FOMC) meeting that ends later in the global day will include the so-called “dot plot,” where members anonymously reveal how soon and often they think the economy will need interest rate rises over the next three years.

A potential default by China Evergrande was not widely seen as having an effect on the Fed’s thinking.

“There’s concern it could depress China’s economy, but if the Chinese authorities can provide liquidity, it’s not going to shock the financial system,” said a market participant at a Japanese bank.

“At this point, it’s likely to have very little impact on the FOMC.”

The market shrugged off the Bank of Japan’s decision to keep monetary policy steady, while downgrading the outlook on exports and output.

The 10-year JGB yield was unchanged at 0.035% at the close, while benchmark 10-year JGB futures rose 0.03 point to 151.86, with a trading volume of 14,350 lots.

The 20-year yield was flat at 0.425%, as was the 30-year yield at 0.650%.

The five-year yield was steady at minus 0.105%.

Two-year JGBs had not traded, and last yielded minus 0.135%.

The benchmark 10-year Treasury yield was little changed at 1.3277%.

Reporting by Tokyo markets team; Editing by Devika Syamnath

Source: Reuters

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