Latest news with #AtaruOkumura
Mint
28-05-2025
- Business
- Mint
Weak Auction Keeps Pressure on Japan to Reduce Long-Bond Supply
Japanese sovereign bonds fell after an auction of 40-year debt met the weakest demand since July, adding pressure on the government to reduce issuance of such securities. The 40-year yield rose 5 basis points following the sale, to 3.335%. Yields on this maturity and the 30-year tenor last week reached the highest on record after the softest demand since 2012 at an auction of 20-year bonds. 'The fact today's auction didn't go very well supports the narrative that the government will adjust its issuance of super-long bonds,' said Kazuhiro Sasaki, head of research at Phillip Securities Japan. Wednesday's sale was a key test globally for longer tenors amid concern that rising government spending will take budget deficits into dangerous territory. In Japan it was also being viewed as an important gauge of appetite from large institutional investors, who have not filled the gap left by the central bank reducing its purchases. 'The weak bidding for the 40-year bond was probably due to the continued high volatility and the fact that the actual issuance amount will not be reduced for another month, making most investors reluctant to take on risk,' said Ataru Okumura, a senior interest-rate strategist at SMBC Nikko Securities. This week's auction results also show how traders and investors are nervous, especially with the finance ministry due to sell benchmark 10-year notes and 30-year debt next week. In a sign that the government may be preparing to adjust issuance after the rout, the finance ministry sent a questionnaire to market participants on Monday evening that asked for their views on issuance and the current market situation, according to people familiar with the matter. The step was seen as unusual because of its timing and the wide group of people contacted, and sparked a rally in super-long-term government bonds Tuesday. The moves followed aggressive upward pressure on global borrowing costs last week that drove up yields on long-maturity debt from the US to Japan. 'In a sense, this is a positive for the bond market, because it increases the likelihood that the finance ministry will do something,' said Sasaki at Phillip Securities, referring to building pressure on Japan's long-term yields. The average bid-to-cover ratio, a measure of demand, for Wednesday's ¥500 billion auction of March 2065 bonds was 2.21. That was lower than 2.92 at the last auction in March. Next month is shaping up as pivotal for the bond market, with the central bank holding a policy meeting June 16-17 at which it is expected to discuss any changes to its tapering of debt purchases. Meanwhile, the finance ministry's questionnaire suggests that it's considering input from market participants on bond issuance. With assistance from Masahiro Hidaka and Alice French. This article was generated from an automated news agency feed without modifications to text.
Japan Times
28-05-2025
- Business
- Japan Times
Japan's 40-year bond sale shows weakest demand since July
Japan's auction of 40-year government bonds on Wednesday met demand that was the weakest since July, as investor appetite fell after volatility surged in global debt markets. The 40-year yield rose 9 basis points to 3.375% following the sale, as the 30-year tenor jumped 10 basis points. "Given we have just had a yield shock, I don't think anyone was expecting a really strong sale,' said Stephen Spratt, rates strategist at Societe Generale. Spratt said demand was unimpressive. The sale was a key test globally for longer tenors amid concern that rising government spending will take budget deficits into dangerous territory. In Japan it was also being viewed as an important gauge of appetite from large institutional investors, who have not filled the gap left by the central bank reducing its purchases. "The weak bidding for the 40-year bond was probably due to the continued high volatility and the fact that the actual issuance amount will not be reduced for another month, making most investors reluctant to take on risk,' said Ataru Okumura, a senior interest-rate strategist at SMBC Nikko Securities. Superlong-term government bonds had rallied Tuesday on signs that the Finance Ministry may be prepared to adjust debt issuance following a rout in the market. The moves followed aggressive upward pressure on global borrowing costs last week that drove up yields on long-maturity debt from the United States to Japan. The average bid-to-cover ratio, a measure of demand, for the bonds was 2.21 for the sale of the Finance Ministry's ¥500 billion ($3.5 billion) issue maturing in March 2065. That was lower than 2.92 at the last auction in March. "The fact today's auction didn't go very well supports the narrative that the government will adjust its issuance of superlong bonds,' said Kazuhiro Sasaki, head of research at Phillip Securities Japan. "So in a sense, this is a positive for the bond market, because it increases the likelihood that the Finance Ministry will do something.' The Finance Ministry — in a move that was unusual because of its timing and the wide group of people contacted — sent a questionnaire to market participants on Monday evening that asked for their views on issuance and the current market situation, said people familiar with the situation. Next month is shaping up as pivotal for the bond market, with the central bank holding a policy meeting on June 16 and 17 at which it is expected to consider any changes to its tapering of debt purchases. Meanwhile, the Finance Ministry is expected to be considering input from market participants on bond issuance.
Wall Street Journal
27-05-2025
- Business
- Wall Street Journal
Ultralong-Dated JGBs Jump; Focus Likely on BOJ's IMES Conference
0005 GMT — Ultralong-dated JGBs jump in price terms in the morning Tokyo session on possible position adjustments. Market focus is likely on the Bank of Japan's Institute for Monetary and Economic Studies conference being held today and Wednesday. With speculation swirling about the timing of the BOJ's 8301 4.02%increase; green up pointing triangle next rate increase, market participants may watch closely for signals in Gov. Ueda's opening remarks. However, SMBC Nikko Securities doesn't expect any strong messages about the outlook given major uncertainty from various sources, senior Japan rates strategist Ataru Okumura says in a recent research report. The 30-year JGB yield falls 9 bps to 2.945%; the 40-year yield slips 10 bps to 3.435%. (
Wall Street Journal
24-04-2025
- Business
- Wall Street Journal
JGBs Fall Amid Improving Risk Appetite
0016 GMT — JGBs fall in price terms in the morning Tokyo session amid an improving risk appetite indicated by gains in Japanese stock markets. Better risk sentiment typically reduces the safe-haven appeal of government debt. Investors may also be adopting a cautious stance before the Finance Ministry's auction today of 2.6 trillion yen of two-year sovereign notes. The outcomes of two-year JGB auctions usually don't move the JGB market, but today's auction will likely give investors an idea of the BOJ's rate-hike expectations, SMBC Nikko Securities' senior Japan rates strategist Ataru Okumura says. Five-year JGB yield is up 2.5bps at 0.925%. (
Wall Street Journal
22-04-2025
- Business
- Wall Street Journal
JGB Futures Fall Ahead of Japan's Liquidity Enhancement Auction
0020 GMT — JGB futures fall in the morning Tokyo session ahead of Japan's liquidity enhancement auction today. Investors' trading activity in Japan's bond market may be low, analysts say. 'There is a risk the superlong JGB liquidity supply auction [today] could trigger a renewed rise in yields,' says SMBC Nikko Securities' senior Japan rates strategist Ataru Okumura in a recent research report. The Finance Ministry is scheduled to offer a combined 450 billion yen worth of many issues of outstanding 20-, 30- and 40-year JGBs today. The 10-year JGB futures are 0.29 yen lower at 140.67 yen. (
