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Time of India
2 days ago
- Business
- Time of India
JGBs fall after weaker-than-expected 20-year bond auction
Japanese government bonds fell on Tuesday after a 20-year bond auction drew weaker-than-expected demand. The 20-year JGB yield rose 2 basis points (bps) to 2.595%. The 10-year JGB yield rose 2.5 bps to 1.595%, its highest since July 25. Yields move inversely to bond prices. Bonds Corner Powered By JGBs fall after weaker-than-expected 20-year bond auction Japanese government bonds experienced a decline. This followed a 20-year bond auction that showed weaker demand than anticipated. The 20-year JGB yield increased. The 10-year JGB yield also rose, reaching its highest point since July 25. Market participants are closely watching the Bank of Japan's potential rate hike in December. Sovereign bond yields surge most in 14 months on hints of higher government borrowing ICRA ESG Ratings launches Second Party Opinion to boost transparency in ESG debt market Probability of another 25bps rate cut by October rises: Puneet Pal Debt market to deepen as overseas participation rises after rating upgrade: Vijay Kuppaa Browse all Bonds News with "The auction was relatively firm, but with the current level of the yield and expected demand from pension funds for rebalancing portfolios, it could have been better," said Naoya Hasegawa , chief bond strategist at Okasan Securities. The auction received bids worth 3.09 times the amount sold, lower than the ratio of 3.15 times at the previous auction in July. Live Events But the tail, or the gap between the lowest and average price, narrowed to 0.13 point from 0.18 point, a sign of improvement. Takashi Fujiwara , chief fund manager at Resona Asset Management's fixed income investment division, said the market was concerned about the bid-to-cover ratio, which was lower than the 3.24 average of the past 12 months. The auction, however, is not going to be a trigger for bear steepener, or the shape of the curve where super-long dated bonds rise faster than short-term rates, because of interest rate-hike expectation, Fujiwara said. Swap rates indicated a 72% chance of the Bank of Japan raising rates by 25 bps to 0.75% at its policy meeting in December. Yields on Japan's super-long bonds are under upward pressure as the market weighs the country's fiscal health. The yield on 30-year bonds hit a record high in July. The two-year JGB yield inched up 0.5 bp to 0.83%. The five-year yield rose 2.5 bps to 1.14%.
Time of India
2 days ago
- Business
- Time of India
India bonds fall; 10-year yield hits 4-month high as fiscal worries sap demand
Indian government bonds continued to decline on Tuesday after the government's proposed tax overhaul stoked fiscal fears and sparked a market rout, pushing the 10-year yield to a more than four-month high. The benchmark 10-year bond was at 6.5192% as of 10:50 a.m. IST, up 2 basis points from Monday's close of 6.4968%. Earlier in the session, it hit 6.5238%, the highest level since April 9. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Average Cost To Rent A Private Jet May Surprise You (View Prices) Private Jet I Search Ads Learn More Undo On Monday, the yield witnessed its biggest rise in 22 months and highest closing level since March 28. Bonds Corner Powered By JGBs fall after weaker-than-expected 20-year bond auction Japanese government bonds experienced a decline. This followed a 20-year bond auction that showed weaker demand than anticipated. The 20-year JGB yield increased. The 10-year JGB yield also rose, reaching its highest point since July 25. Market participants are closely watching the Bank of Japan's potential rate hike in December. Sovereign bond yields surge most in 14 months on hints of higher government borrowing ICRA ESG Ratings launches Second Party Opinion to boost transparency in ESG debt market Probability of another 25bps rate cut by October rises: Puneet Pal Debt market to deepen as overseas participation rises after rating upgrade: Vijay Kuppaa Browse all Bonds News with Bond yields move inversely to prices. On Friday, Prime Minister Narendra Modi rolled out major overhauls to the goods and services tax , which will lower prices on everyday essentials and electronics starting in October. Live Events Government officials insist the fiscal deficit goal is still within reach, even as the plan trims a significant revenue source. Some strategists and economists also see room for the government to be able to absorb these losses. The central government could offset the revenue shortfall by utilizing compensation cess collections, the surplus marketing margins of oil marketing companies through higher excise, and through funds from select schemes, strategists at Kotak Institutional Equities said in a note. "States may have limited room to absorb SGST losses unless the centre shares gains from these measures." Meanwhile, traders fear that the tax-reform plan could widen federal and state budget deficit and lead to higher debt supply, dampening demand. "We cannot rule out further selling from these levels, especially in the benchmark paper, which would see heavy supply on Friday via auction," a trader with a state-run bank said. RATES India's overnight index swap rates jumped in early trading, as rates traders continued paying while fiscal worries weighed on government bonds. The one-year OIS rate was up 2 bps at 5.56% and the two-year OIS rate rose nearly 4 bps to 5.5350%. The liquid five-year OIS rate rose 5 bps to 5.77%.
