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Business Recorder
13-08-2025
- Business
- Business Recorder
JGBs fall after weakest auction in 5 years spurs sell-off
TOKYO: Japanese government bonds dropped on Wednesday after a five-year bond auction drew the weakest demand in more than five years, triggering a wave of selling by investors. The five-year yield rose 3 basis points (bps) to 1.070%. The 10-year JGB yield rose 2.5 bps to 1.525%. Yields move inversely to bond prices. The lacklustre auction followed a session in which the 10-year JGBs untraded all day, reflecting thin liquidity during Japan's 'Obon' holiday season. 'The market was worried about the liquidity and hesitated to participate in the auction,' said Katsutoshi Inadome, a senior strategist at Sumitomo Mitsui Trust Asset Management. The auction received bids worth 2.96 times the amount sold, the lowest ratio since March 2020, and lower than a ratio of 3.54 times at the previous auction in July. The level of the five-year bond yield was not high enough, so that the market was afraid to buy bonds in case the yield rises in the coming sessions, said Miki Den, a senior Japan rate strategist at SMBC Nikko Securities. JGB yields have eased from their highs in July as expectations of a rate hike by the Bank of Japan receded, following the central bank's caution over persistent risks to the economic outlook. The two-year JGB yield rose 1.5 bps to 0.785%. Yields on longer-dated bonds fell, with 20-year JGB yield slipping 0.5 bp to 2.515%. The 30-year JGB yield fell 0.5 bp to 3.085%. The 40-year JGB yield fell 1.5 basis points to 3.285%. Reuters
Mint
13-08-2025
- Business
- Mint
JGBs fall after weakest auction in 5 years spurs sell-off
TOKYO, Aug 13 (Reuters) - Japanese government bonds dropped on Wednesday after a five-year bond auction drew the weakest demand in more than five years, triggering a wave of selling by investors. The five-year yield rose 3 basis points (bps) to 1.070%. The 10-year JGB yield rose 2.5 bps to 1.525%. Yields move inversely to bond prices. The lacklustre auction followed a session in which the 10-year JGBs untraded all day, reflecting thin liquidity during Japan's "Obon" holiday season. "The market was worried about the liquidity and hesitated to participate in the auction," said Katsutoshi Inadome, a senior strategist at Sumitomo Mitsui Trust Asset Management. The auction received bids worth 2.96 times the amount sold, the lowest ratio since March 2020, and lower than a ratio of 3.54 times at the previous auction in July. The level of the five-year bond yield was not high enough, so that the market was afraid to buy bonds in case the yield rises in the coming sessions, said Miki Den, a senior Japan rate strategist at SMBC Nikko Securities. JGB yields have eased from their highs in July as expectations of a rate hike by the Bank of Japan receded, following the central bank's caution over persistent risks to the economic outlook. The two-year JGB yield rose 1.5 bps to 0.785%. Yields on longer-dated bonds fell, with 20-year JGB yield slipping 0.5 bp to 2.515%. The 30-year JGB yield fell 0.5 bp to 3.085%. The 40-year JGB yield fell 1.5 basis points to 3.285%. (Reporting by Junko Fujita; Editing by Sherry Jacob-Phillips)
Business Times
13-08-2025
- Business
- Business Times
Japan's bond market risks back in focus ahead of five-year sale
[TOKYO] Japan will auction five-year government bonds on Wednesday (Aug 13) against the backdrop of renewed concerns over poor liquidity and volatility in the nation's debt market. The benchmark 10-year bond was not traded at all on Tuesday, the first such instance in more than two years, before seeing transactions on Wednesday, according to data from an institutional brokerage. That lack of liquidity comes against the backdrop of choppy trading in global debt markets. German 30-year yields climbed to the highest level in 14 years on Tuesday, the latest evidence of growing pressure on longer-dated bonds. This area of the yield curve in Japan has been particularly volatile this year, sometimes following moves in overseas markets, on other occasions causing them. Meanwhile, yields on short-term US Treasuries slid following inflation data that bolstered the case for a near-term rate cut from the Federal Reserve. Despite the concerning signs, strategists in Tokyo were mostly sanguine about the five-year JGB sale that takes place around midday in Tokyo. Kazuhiko Sano, chief strategist at Tokai Tokyo Securities, said bond prices may decline in the morning but should rebound later in the day, nudging down yields. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The auction is expected to pass smoothly, said Miki Den, senior rates strategist at SMBC Nikko Securities, noting that the five-year yield has been trading above the level seen at the time of the previous auction. He added that while there were risks of fluctuations in both directions in the near term, the risk of declines was somewhat greater. The five-year yield rose two basis points to 1.06 per cent on Wednesday morning in Tokyo. After Tuesday's hiatus, the 10-year yield increased by 1.5 basis points to 1.515 per cent. Investors will be focused on key demand measures when the results come through at 12.35 pm local time. The average bid-to-cover ratio was 3.54 at the prior sale, and the 12-month average is 3.78. The tail, or gap between average and lowest-accepted prices, was 0.02 at last month's auction. The sale also comes after the Bank of Japan's policy meeting last month tempered some expectations for a near-term rate hike, with governor Kazuo Ueda rebuffing concerns the central bank is behind the curve in taming inflation. BLOOMBERG
Yahoo
10-07-2025
- Business
- Yahoo
Japan 20-Year Bond Sale Leaves Traders in Limbo Before Election
(Bloomberg) -- Japan's 20-year government bond auction went off without spectacle, leaving an uneasy calm ahead of elections later this month as investors look for signs of a possible increase in the nation's debt. Singer Akon's Failed Futuristic City in Senegal Ends Up a $1 Billion Resort Are Tourists Ruining Europe? How Locals Are Pushing Back Can Americans Just Stop Building New Highways? Denver City Hall Takes a Page From NASA Philadelphia Trash Piles Up as Garbage Workers' Strike Drags On Demand showed some improvement over recent sales. The bid-to-cover ratio of 3.15 was below the 12-month average but still the highest level since March. The tail, or gap between average and lowest-accepted prices, was 0.18, the narrowest since January. The Ministry of Finance has adjusted its issuance to reduce the amount of longer-maturity bonds it sells, which has curbed bond-market volatility. Yet investors are concerned about the market impact of rising debt levels, which are in the spotlight as politicians seek to woo voters with more government spending or tax cuts ahead of an election of the Upper House later this month. 'The 20-year bond auction held today produced a neutral outcome, with neither the bid-to-cover ratio nor the tail being particularly weak,' said Miki Den, senior rates strategist at SMBC Nikko Securities. 'In addition to the fact that yield levels had become more attractive, the stabilization of super-long-term bonds since the previous day and the halt in the steepening of the yield curve also contributed to making the bonds easier to buy.' The yield on the 20-year bond were unchanged on the day at 2.51%, after dropping 2.5 basis points ahead of the auction. Bond futures rose 4 ticks to 138.73. Sovereign bond yields surged globally earlier this week, with the 30-year Treasury yield heading back toward 5% as some of the world's biggest banks sent fresh warnings over fiscal spending concerns. US Treasuries rallied on Wednesday after an auction of 10-year notes drew strong demand, easing concerns that investors will balk at financing swelling US deficits. What Bloomberg Strategists say: 'The 20-year JGB auction just went off with solid metrics on the surface. However, with upper house elections to come, bond investors will go on being wary of longer-end debt amid fiscal spending risks.' — Mark Cranfield, Markets Live Strategist, Singapore. For the full analysis, click here. In Japan, some major life insurers continue to be skeptical. Meiji Yasuda Life Insurance Co. said it plans to avoid actively investing in Japanese super-long-term government bonds for the next year or two as interest rates may rise and supply pressures build. This is right when the central bank — the dominant holder — is trying to gradually back out of the market. A partial list of winning bidders showed Nomura Securities Co. scooped up the most bonds at Thursday's sale with a more than 16% take-up, while Mitsubishi UFJ Morgan Stanley Securities Co. came in second with over 11%. These names may be an indication of solid support from long-term investors, according to Bloomberg's Cranfield. The election, scheduled for July 20, comes on the heels of slightly higher tariffs of 25% starting August 1 imposed by US President Donald Trump earlier this week. The US is also monitoring the upcoming vote closely — US Treasury Secretary Scott Bessent has said it is putting 'domestic constraints' on sealing a trade deal. 'Uncertainty should remain until we can see how the political landscape evolves after the election,' said Ken Matsumoto, a macro strategist at Credit Agricole in Tokyo. 'We don't think super long ends like thirty-year would head toward 4%, so the current level of around 3% is understandable.' --With assistance from Mia Glass. (Adds buyer names, updates yields) Will Trade War Make South India the Next Manufacturing Hub? 'Our Goal Is to Get Their Money': Inside a Firm Charged With Scamming Writers for Millions Pistachios Are Everywhere Right Now, Not Just in Dubai Chocolate 'Telecom Is the New Tequila': Behind the Celebrity Wireless Boom SNAP Cuts in Big Tax Bill Will Hit a Lot of Trump Voters Too ©2025 Bloomberg L.P. 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
10-07-2025
- Business
- Yahoo
Japan 20-Year Bond Sale Leaves Traders in Limbo Before Election
(Bloomberg) -- Japan's 20-year government bond auction went off without spectacle, leaving an uneasy calm ahead of elections later this month as investors look for signs of a possible increase in the nation's debt. Singer Akon's Failed Futuristic City in Senegal Ends Up a $1 Billion Resort Are Tourists Ruining Europe? How Locals Are Pushing Back Can Americans Just Stop Building New Highways? Denver City Hall Takes a Page From NASA Philadelphia Trash Piles Up as Garbage Workers' Strike Drags On Demand showed some improvement over recent sales. The bid-to-cover ratio of 3.15 was below the 12-month average but still the highest level since March. The tail, or gap between average and lowest-accepted prices, was 0.18, the narrowest since January. The Ministry of Finance has adjusted its issuance to reduce the amount of longer-maturity bonds it sells, which has curbed bond-market volatility. Yet investors are concerned about the market impact of rising debt levels, which are in the spotlight as politicians seek to woo voters with more government spending or tax cuts ahead of an election of the Upper House later this month. 'The 20-year bond auction held today produced a neutral outcome, with neither the bid-to-cover ratio nor the tail being particularly weak,' said Miki Den, senior rates strategist at SMBC Nikko Securities. 'In addition to the fact that yield levels had become more attractive, the stabilization of super-long-term bonds since the previous day and the halt in the steepening of the yield curve also contributed to making the bonds easier to buy.' The yield on the 20-year bond were unchanged on the day at 2.51%, after dropping 2.5 basis points ahead of the auction. Bond futures rose 4 ticks to 138.73. Sovereign bond yields surged globally earlier this week, with the 30-year Treasury yield heading back toward 5% as some of the world's biggest banks sent fresh warnings over fiscal spending concerns. US Treasuries rallied on Wednesday after an auction of 10-year notes drew strong demand, easing concerns that investors will balk at financing swelling US deficits. What Bloomberg Strategists say: 'The 20-year JGB auction just went off with solid metrics on the surface. However, with upper house elections to come, bond investors will go on being wary of longer-end debt amid fiscal spending risks.' — Mark Cranfield, Markets Live Strategist, Singapore. For the full analysis, click here. In Japan, some major life insurers continue to be skeptical. Meiji Yasuda Life Insurance Co. said it plans to avoid actively investing in Japanese super-long-term government bonds for the next year or two as interest rates may rise and supply pressures build. This is right when the central bank — the dominant holder — is trying to gradually back out of the market. A partial list of winning bidders showed Nomura Securities Co. scooped up the most bonds at Thursday's sale with a more than 16% take-up, while Mitsubishi UFJ Morgan Stanley Securities Co. came in second with over 11%. These names may be an indication of solid support from long-term investors, according to Bloomberg's Cranfield. The election, scheduled for July 20, comes on the heels of slightly higher tariffs of 25% starting August 1 imposed by US President Donald Trump earlier this week. The US is also monitoring the upcoming vote closely — US Treasury Secretary Scott Bessent has said it is putting 'domestic constraints' on sealing a trade deal. 'Uncertainty should remain until we can see how the political landscape evolves after the election,' said Ken Matsumoto, a macro strategist at Credit Agricole in Tokyo. 'We don't think super long ends like thirty-year would head toward 4%, so the current level of around 3% is understandable.' --With assistance from Mia Glass. (Adds buyer names, updates yields) Will Trade War Make South India the Next Manufacturing Hub? 'Our Goal Is to Get Their Money': Inside a Firm Charged With Scamming Writers for Millions Pistachios Are Everywhere Right Now, Not Just in Dubai Chocolate 'Telecom Is the New Tequila': Behind the Celebrity Wireless Boom SNAP Cuts in Big Tax Bill Will Hit a Lot of Trump Voters Too ©2025 Bloomberg L.P. Sign in to access your portfolio
