Latest news with #KatsunobuKato
Yahoo
2 days ago
- Business
- Yahoo
Super-long JGB yields rise from 3-week lows ahead of 40-year bond auction
By Kevin Buckland TOKYO (Reuters) -Long-dated Japanese government bond yields climbed off three-week lows on Wednesday, with investors closely monitoring a 40-year bond auction for indications of a recovery in demand. The 40-year JGB yield rose 3.5 basis points (bps) to 3.32% by 0200 GMT, rebounding from a sharp 26.5 bps decline to 3.285% - its lowest level since May 7 - after Reuters reported that the finance ministry is considering trimming the issuance of super-long debt in response to a recent surge in yields. The 30-year JGB yield climbed 5 bps to 2.88% and the 20-year yield bounced 4.5 bps to 2.45%, after tumbling to approximately three-week troughs in the prior session. The 40-year auction results are due at 0335 GMT. "The relatively large decline in long-term interest rates yesterday may be attributed to the inherently low liquidity in the ultra-long-term zone," Mizuho analysts wrote in a client note. "There appears to be room for further decline if additional issuance reductions actually take place and sentiment improves." Last week, 30- and 40-year JGB yields hit record peaks at 3.185% and 3.675%, respectively, while the 20-year yield hit a multi-decade high of 2.60%. Yields had been rising steadily for weeks, but selling pressure intensified abruptly amid growing concerns over debt levels in major developed economies, particularly Japan and the United States, and waning demand from traditional buyers of super-long JGBs, such as life insurers. Japanese Finance Minister Katsunobu Kato reiterated on Wednesday that he is closely monitoring developments in the bond market, echoing similar remarks made the previous day. Bank of Japan Governor Kazuo Ueda said the central bank will watch whether swings in super-long yields have a knock-on effect for shorter maturities, which have a larger impact on economic activity. The 10-year JGB yield gained 3.5 bps to 1.495% on Wednesday, after dipping to 1.455% for the first time since May 16 in the previous session. The five-year yield rose 3 bps to 1.03%, while the two-year yield added 1.5 bps to 0.745%. Benchmark 10-year JGB futures fell 0.36 yen to 139.09 yen. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
2 days ago
- Business
- Yahoo
Super-long JGB yields rise from 3-week lows ahead of 40-year bond auction
By Kevin Buckland TOKYO (Reuters) -Long-dated Japanese government bond yields climbed off three-week lows on Wednesday, with investors closely monitoring a 40-year bond auction for indications of a recovery in demand. The 40-year JGB yield rose 3.5 basis points (bps) to 3.32% by 0200 GMT, rebounding from a sharp 26.5 bps decline to 3.285% - its lowest level since May 7 - after Reuters reported that the finance ministry is considering trimming the issuance of super-long debt in response to a recent surge in yields. The 30-year JGB yield climbed 5 bps to 2.88% and the 20-year yield bounced 4.5 bps to 2.45%, after tumbling to approximately three-week troughs in the prior session. The 40-year auction results are due at 0335 GMT. "The relatively large decline in long-term interest rates yesterday may be attributed to the inherently low liquidity in the ultra-long-term zone," Mizuho analysts wrote in a client note. "There appears to be room for further decline if additional issuance reductions actually take place and sentiment improves." Last week, 30- and 40-year JGB yields hit record peaks at 3.185% and 3.675%, respectively, while the 20-year yield hit a multi-decade high of 2.60%. Yields had been rising steadily for weeks, but selling pressure intensified abruptly amid growing concerns over debt levels in major developed economies, particularly Japan and the United States, and waning demand from traditional buyers of super-long JGBs, such as life insurers. Japanese Finance Minister Katsunobu Kato reiterated on Wednesday that he is closely monitoring developments in the bond market, echoing similar remarks made the previous day. Bank of Japan Governor Kazuo Ueda said the central bank will watch whether swings in super-long yields have a knock-on effect for shorter maturities, which have a larger impact on economic activity. The 10-year JGB yield gained 3.5 bps to 1.495% on Wednesday, after dipping to 1.455% for the first time since May 16 in the previous session. The five-year yield rose 3 bps to 1.03%, while the two-year yield added 1.5 bps to 0.745%. Benchmark 10-year JGB futures fell 0.36 yen to 139.09 yen.
New Straits Times
2 days ago
- Business
- New Straits Times
Japan auction of 40-year debt in focus for signs of sovereign fiscal stress
TOKYO: The markets will be closely watching an auction of Japan's longest tenor bonds on Wednesday to see if debt investors will continue to put up with the worsening finances of major government issuers. Bond yields, particularly on the long end, have surged around the world in recent weeks as concerns mount over fiscal deficits. Heavily indebted Japan's government bonds are the "canary in the global duration coalmine," Goldman Sachs analysts wrote last week after poor demand at a sale of 20-year bonds. JGBs rallied sharply in the afternoon on Tuesday after Reuters reported that the Ministry of Finance may tweak its issuance plan to reduce issuance of super-long bonds. That would come too late to impact Wednesday's sale of about 500 billion yen (US$3.5 billion) of 40-year bonds, whose yields touched a record high 3.675 per cent last week, along with an all-time high for 30-year paper and a multi-decade peak for 20-year debt. Long-dated debt has sold off on concerns tax cuts and a chaotic roll-out of sweeping tariffs by US President Donald Trump will stoke inflation and impel governments to spend more. That has driven up the term premium - the extra yield offered to buyers in exchange for locking up their money in longer-dated securities. Moody's on May 17 became the last major rating agency to strip the United States of its top grade because of growing debt, which stands at about 124 per cent of GDP. But the situation is more precarious in Japan, where the debt ratio is double that amount and the central bank has slashed its bond buying to support the economy. Finance Minister Katsunobu Kato warned that higher rates could further imperil Japan's finances and pledged "appropriate" management of its debt. What sets Japan apart from other markets is that its finance chiefs are directly addressing the dramatic runup in longer yields and acting to prop them up, said Shoki Omori, chief desk strategist at Mizuho Securities. "If you look at other places in the world, say Europe or the US I don't think any policymakers are saying that they will support the long end," Omori said. "If you look at the US, it's the opposite." A reduction in issuance of 20-, 30- or 40-year JGBs would be counterbalanced by increased sales of shorter-dated debt, sources told Reuters, meaning overall issuance for the fiscal year would remain at 172.3 trillion yen. The change would be positive for super-long bonds, but now attention turns to how much the MOF will scale things back by, said Shinichiro Kadota, head of Japan FX and rates strategy at Barclays Securities Japan. "A smaller-than-expected reduction could be a cue for a sell-off," Kadota said. The MOF may look to pre-COVID levels of super-long supply, which would be about 3 trillion yen less than current levels, Societe Generale analysts said in a note. The trigger for last week's sell-offs in JGBs was an auction of 20-year debt that saw the tail - the difference between the lowest and average accepted prices - reach its widest since 1987, signalling weak demand. The 40-year sale on Wednesday won't have a tail due to a difference in auction procedure, but traders may watch the bid-to-cover ratio, with higher numbers indicating healthier demand. The longest tenor bonds have averaged ratios of 3 since they were first sold in 2007. Mizuho's Omori said the auction is likely to go well due to speculation over MOF issuance tweaks, but it may be a short-term fix.
Time of India
3 days ago
- Business
- Time of India
Japan loses position as world's largest creditor nation as Germany claims title after 34 years
Japan's position as the world's leading net-creditor nation over the years was due to decades of current account surpluses. (AI image) Japan is no longer the world's leading creditor nation - and that's a first in 34 years! Germany has taken the top spot despite Japan's record overseas assets. Japan had held the top position since surpassing Germany in 1991. Japan's position as the world's leading net-creditor nation over the years was due to decades of current account surpluses, leading to substantial foreign investments by Japanese entities. According to the Ministry of Finance data quoted by Bloomberg, Japan's net external assets reached ¥533.05 trillion ($3.7 trillion) at the end of 2024, showing a 13% increase from the previous year. Although this figure was a record high, Germany surpassed it with net external assets of ¥569.7 trillion. China maintained its third position with net assets of ¥516.3 trillion. Germany's rise to the top position is attributed to its substantial current account surplus of €248.7 billion in 2024, primarily due to strong trade performance. In comparison, Japan's surplus was ¥29.4 trillion, approximately €180 billion, according to the finance ministry. The loss of this position indicates that whilst Japan's assets continue to grow, other nations, including Germany and China, have experienced stronger actual demand. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 2025: Steel Suppliers From Mexico At Lowest Prices (Take A Look) Steel Suppliers | search ads Search Now Undo Also Read | 'Will not discuss…': US tells WTO that India has no basis to impose retaliatory duties on 29 American products A nation's net foreign assets represent the difference between its overseas assets and domestic assets owned by foreigners, adjusted for currency value changes. This calculation essentially reflects the cumulative changes in the country's current account. The euro-yen exchange rate increased by about 5% last year, amplifying the difference between German and Japanese assets when measured in yen. On Tuesday, Minister of Finance Katsunobu Kato indicated he was not concerned about this development. Kato explained to reporters that Japan's consistent growth in net external assets means the ranking shouldn't be viewed as a significant shift in Japan's standing. Japan experienced growth in both foreign assets and liabilities, with assets showing stronger growth due to increased international business investments, influenced by the yen's depreciation. The data released on Tuesday aligns with broader foreign direct investment patterns. The ministry reported that Japanese firms maintained strong foreign direct investment in 2024, particularly in the US and UK markets, with substantial investments flowing into finance, insurance and retail sectors. Also Read | Explained in charts: India to become 4th largest world economy soon. What's the road ahead to No.3 spot? According to Karakama, Japan's shift towards direct investment rather than foreign securities has made capital repatriation less flexible. "It's easy to imagine domestic investors selling foreign bonds and securities when risks emerge, but they're not going to divest from overseas companies they've acquired so easily," Bloomberg reported Karakama as saying. The future direction of outbound investment could depend on Japanese companies' continued overseas expansion, particularly in the US. President Donald Trump's tariff policies might influence some firms to transfer assets or production to the US to address trade-related concerns. However, Karakama noted that these uncertainties might also lead some companies to prefer domestic operations and avoid higher-risk investments. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Zawya
3 days ago
- Business
- Zawya
Dollar strengthens, yen slips as Japanese yields slump
LONDON - The dollar strengthened on Tuesday as the yen came under pressure from a sharp fall in Japan's long-dated bond yields, while investors took comfort from U.S. President Donald Trump's decision to delay higher tariffs on the European Union. With U.S. and UK markets closed for a public holiday on Monday, analysts said some traders were still catching up with Sunday's news that Trump had delayed tariffs on the EU. While that news boosted the euro on Monday, it was also viewed as positive for the dollar, which was broadly firm on Tuesday, with the dollar index last up around 0.4%. "I would guess it is because Trump retreated over the weekend. Yesterday markets were closed so there was only a small move. Now, with the UK being back, it's a recovery of the move we saw on Friday," said Commerzbank FX analyst Michael Pfister. Dollar strength was most visible versus the yen. The dollar was up 0.86% at 144.075 yen as long-dated Japanese government bond yields fell sharply after a Reuters report that the country's Ministry of Finance would consider trimming issuance of super-long bonds in the wake of recent sharp rises in yields for the notes. "It's a big move so obviously it's dragging down the currency," said Francesco Pesole, FX strategist at ING on the move down in Japanese bond yields. "The yen is still probably the G10 currency - outside of the dollar - that has more domestic drivers." Japanese Finance Minister Katsunobu Kato said on Tuesday the government was closely watching the debt market, while Bank of Japan Governor Kazuo Ueda said the central bank must be vigilant on rising consumer prices in Japan, signalling its readiness to keep hiking rates. Bond yields, particularly on the long end, have surged globally on mounting concerns over growing fiscal deficits in advanced economies, led by the U.S. and Japan. Attention remains on debate in the U.S. Senate on Trump's tax-cut bill that is expected to add to the debt pile in the world's largest economy. Markets have been sensitive to Trump's proposal, particularly after Moody's downgrade of the U.S. sovereign credit rating on May 16. The U.S. House of Representatives last week passed a version of Trump's tax-cut bill that is calculated to add about $3.8 trillion to the federal government's $36.2 trillion in debt over the next decade, according to the Congressional Budget Office. Trump said on Sunday that the bill was likely to see "significant" changes as it is debated in the Senate. In a note, Scotiabank FX strategists said the dollar's short-term downtrend remains intact amid worries about the impact of tariffs on the U.S. economy, fiscal policy trends, and the U.S. administration's relations with the Federal Reserve. Investor confidence in U.S. assets has waned in recent months in the wake of Trump's erratic tariff policies. In the latest example, Trump backed down from threatened 50% duties on EU shipments from June 1, sending the euro rallying to a one-month high. The euro was last down 0.33% against a broadly firm dollar at $1.134800, while sterling slipped 0.1% to $1.35475 . The dollar gained 0.7% against the Swiss franc to 0.82660.
