Latest news with #governmentbonds
Yahoo
10 hours ago
- Business
- Yahoo
Japan's Bonds Pass 10-Year Supply Test as 30-Year Sale Looms
(Bloomberg) -- Stronger demand at Japan's 10-year bond sale brought some temporary relief as traders position for another auction in less than 48 hours that will test appetite for longer-dated debt. Where the Wild Children's Museums Are Billionaire Steve Cohen Wants NY to Expand Taxpayer-Backed Ferry The Economic Benefits of Paying Workers to Move Now With Colorful Blocks, Tirana's Pyramid Represents a Changing Albania At London's New Design Museum, Visitors Get Hands-On Access Government bond futures inched up to 139.15 as of 3:45 p.m. in Tokyo after a key gauge of demand at Tuesday's auction rose to the highest since April 2024. Ten-year bond yields fell 2.5 basis points to 1.48%. Investors are still wary as the market has to absorb 30-year supply on Thursday against a backdrop of rising long-term yields globally. Read: A Guide to Japan's Closely Watched Government Bond Auctions 'It was a good result as the 1.5% level was easy to buy at,' said Miki Den, a senior rates strategist at SMBC Nikko Securities Inc. in Tokyo. 'Although this will support the bond market, it's unlikely that yields will fall rapidly,' with the 30-year auction looming. Confidence in longer-maturity notes globally has been crumbling as investors are concerned about massive budget deficits, which may result in heftier debt loads in some of the world's biggest economies. On top of that, the Bank of Japan's pullback from its huge bond purchases has led to a sharp steepening of the nation's bond curve and heightened worries about government borrowing. In a sign of concern about the investor base for Japanese bonds, the government is urging more domestic buying of the notes, according to a draft of its annual fiscal policy plan seen by Bloomberg. The selloff in Japanese bonds has been exacerbated by concerns about which investors will step in as the BOJ reduces its holdings. Governor Kazuo Ueda hinted that the central bank may continue to slow the pace of government bond buying next fiscal year, in response to questions in parliament Tuesday. The central bank will review its bond purchase plan at its June 16-17 policy meeting. After years of yields being pinned down at artificially low levels by the central bank, Japan's bond market is now experiencing a painful transition to normal functioning. This was laid bare by a lack of demand at Japan's 20- and 40-year debt sales last month. Investors will be paying close attention to the 30-year auction after yields last month hit 3.185%, the highest level since the tenor was first sold. Thirty-year yields rose half a basis point to 2.935% on Tuesday afternoon in Tokyo. Since last summer, Japan's central bank has been reducing its purchases of government bonds by ¥400 billion ($2.8 billion) every quarter, but that process will likely come to a halt, former board member Makoto Sakurai said in an interview Monday in Tokyo. Speculation has increased that the finance ministry may adjust its debt sales after it sent a questionnaire last week to market participants asking their views on issuance and the current situation. That news 'may have reduced concerns about the problems in the super-long sector spilling over into 10-year bonds,' said Katsutoshi Inadome, a senior strategist at Sumitomo Mitsui Trust Asset Management Co. The bid-to-cover ratio at the ¥2.6 trillion sale of 10-year notes rose to 3.66, compared with 2.54 at last month's auction, and higher than the average over the past year. 'With the 30-year bond auction coming up on Thursday, the fog will not lift all at once, but this result is rather good news,' said Inadome. --With assistance from Masaki Kondo, Naoto Hosoda, Hidenori Yamanaka, Eddy Duan and Yuko Takeo. (Adds government's draft fiscal policy plan in fifth paragraph, updates bond yields.) YouTube Is Swallowing TV Whole, and It's Coming for the Sitcom Millions of Americans Are Obsessed With This Japanese Barbecue Sauce Mark Zuckerberg Loves MAGA Now. Will MAGA Ever Love Him Back? Trump Considers Deporting Migrants to Rwanda After the UK Decides Not To Will Small Business Owners Knock Down Trump's Mighty Tariffs? ©2025 Bloomberg L.P.
CNA
14 hours ago
- Business
- CNA
Japan to promote domestic ownership of JGBs, policy draft shows
TOKYO :Japan should promote the domestic ownership of government bonds to avoid further rises in long-term interest rates caused by supply-demand imbalances, according to a draft of the government's economic policy guidelines reviewed by Reuters. The draft also said Japan should keep its goal of delivering a primary budget surplus, aiming to achieve the target "as early as possible during fiscal years 2025 to 2026." But it also pointed out that the target year "should be reassessed as needed, given that the impact of U.S. tariff policies remains uncertain and their effects on Japan's economy and finances need to be examined." The draft of the annual economic and fiscal policy guidelines, to be finalised later this month after discussions with ruling party lawmakers, reflects the government's pledge to maintain fiscal discipline after a recent bond market rout. While yields on shorter-term bonds have remained stable on diminishing prospects of a near-term rate hike, those on super-long Japanese government bonds (JGBs) soared to all-time highs last month amid calls from politicians for big fiscal spending. Reuters reported that Japan will consider trimming issuance of super-long bonds in the wake of recent sharp rises in yields for the notes, as policymakers seek to soothe market concerns about worsening government finances. The draft called for efforts to ensure an environment where government bonds are issued in a stable manner. The government's long-term policy blueprint sets a goal of fiscal year 2025 to achieve a primary budget surplus, or fund spending without resorting to debt, a pledge it has maintained since 2018. The primary budget balance, which excludes new bond sales and debt-servicing costs, is a key gauge of the extent to which policy measures can be funded without resorting to debt. A government estimate earlier this year showed the target could be pushed back again as Prime Minister Shigeru Ishiba's minority government faces various demands from opposition parties that could potentially inflate the budget.
Bloomberg
17 hours ago
- Business
- Bloomberg
BOJ Likely to End Bond Purchase Cuts Next Year, Ex-Official Says
The Bank of Japan will probably decide to stop reducing the amount of its government bond purchases in a plan for next fiscal year when authorities gather this month, as they eye a worrisome surge in JGB yields, according to a former BOJ board member. Since last summer, the bank has been reducing its buying of government bonds by ¥400 billion ($2.8 billion) every quarter, but that process will come to a halt, former board member Makoto Sakurai said in an interview Monday in Tokyo.
Reuters
2 days ago
- Business
- Reuters
BOJ long-term government bond holdings fall for first time since 2008
TOKYO, May 28 (Reuters) - The Bank of Japan's long-term government bond holdings fell for the first time in 16 years as of end-March as it tapered bond purchases, its earnings showed on Wednesday, in another sign of its steady retreat from a massive decade-long stimulus policy. As a result of its interest rate hikes, the central bank paid 1.25 trillion yen ($8.3 billion) in interest on excess reserves parked at the BOJ in the fiscal year that ended in March - a move aimed at mopping up liquidity from the market to nudge short-term borrowing costs around its 0.5% policy rate. As its monetary tightening drove down bond prices, the BOJ's government bond holdings incurred valuation losses of 28.6 trillion yen, the largest since the BOJ began using current accounting methods in 2004, its 2024 fiscal year earnings showed. The earnings data highlight the cost the BOJ is paying to normalise monetary policy and whittle down a balance sheet that has ballooned from years of heavy bond buying. The BOJ exited a massive stimulus programme in March last year and pushed up short-term interest rates to 0.25% in July and 0.5% in January. It also began slowing its huge bond purchases under a taper programme laid out in July. The central bank's holdings of long-term Japanese government bonds (JGB) stood at 574.2 trillion yen as of the March end of fiscal 2024, down 11.4 trillion yen from a year earlier, marking the first decrease since 2008, its earnings showed. Its total government bond holdings, including short-term debt, fell 13.7 trillion yen to 575.9 trillion yen, the earnings showed, declining for the first time in three years. The BOJ has signaled its readiness to keep tapering its bond buying. At its policy meeting next month, it will conduct an interim review of its bond tapering plan running through March and come up with a programme for April 2026 onward. Many market players expect the BOJ to make no big changes to its existing taper plan and believe it will likely maintain or slightly slow the pace of tapering from April 2026 and beyond. While describing the BOJ's balance sheet as too big, Governor Kazuo Ueda said in March it was hard to predict how much it ought to reduce its size which, at around 745 trillion yen, exceeds the size of Japan's gross domestic product. ($1 = 144.1100 yen)
Yahoo
3 days ago
- Business
- Yahoo
Japan's warning, the trade war's next phase, and Trump Media's Bitcoin buy: Markets news roundup
Demand for Japan's 40-year government bonds plunged Wednesday to its lowest level since last July, reinforcing fears that appetite for ultra-long Japanese debt is evaporating. Read More Stocks opened higher Thursday morning after a federal court struck down most of President Donald Trump's 'Liberation Day' tariffs, fueling early optimism that one of 2025's biggest economic headwinds could be moving into the rearview. Read More The U.S. housing market has undergone an unprecedented shift: Sellers now outnumber buyers by approximately 490,000. It's the largest disparity since Redfin, a real estate company, began tracking the data in 2013. Redfin's report, published Thursday, forecasts that if current trends persist, home prices could decline by 1% by the end of 2025, on average. 'Prospective buyers may see their purchasing power increase, and prospective sellers should consider selling sooner rather than later,' the report states. Read More Trump Media & Technology Group has tapped investors for $2.5 billion to fund a cryptocurrency reserve. Institutional investors have bought shares in the firm under a private placement, the Trump family's media company announced Tuesday, with the proceeds set to be invested in Bitcoin. Read More Uncertainty among homeowners and buyers is at a three-year high, according to Bank of America's (BAC) Homebuyer Insights Report published Wednesday. Of the survey's 2,000 respondents nationwide, 60% said they are unsure whether now is a good time to buy, compared to 48% in 2023. Despite this, about half of the prospective homebuyers surveyed feel optimistic about the market, saying it's improved over the past year. Respondents expect this to continue: 75% foresee home prices and interest rates falling, and are waiting until then to buy a new home. That's up from 62% in 2023. Read More Shein appears to be abandoning its hopes for a flotation in London. The fast-fashion retailer is reportedly preparing to list on the Hong Kong stock exchange as its application to launch an initial public offering on the London Stock Exchange stalls with Chinese regulators, Reuters reported Wednesday. While Shein is headquartered in Singapore, it was founded in China, where the majority of its suppliers remain. Read More Consumers' attitudes about the U.S. economy improved in April as trade tensions eased. The latest survey of consumers from the Conference Board released on Tuesday indicated consumer confidence was rebounding, breaking a five-month slump. It leapt to a score of 98 in April compared to 85.7 a month earlier, sharply overtaking economists' expectations. (A score of 100 equals the benchmark score for 1985.) The gains in consumer confidence was spread out among all income and age groups, the Conference Board said. Read More Treasury yields fell on Tuesday with bond markets a little more reassured that a new front in the trade war won't be opened in the near future. The thirty-year Treasury yield dropped five basis points to 4.984% as stock futures surged. Meanwhile, the ten-year Treasury yield had shed four basis points to 4.475% at the time of publication. Read More International growth is slowing, fewer new jobs will be created, and the global income gap is rising — largely because of elevated trade tension spearheaded by U.S. President Donald Trump. That's according to the International Labour Organization (ILO), a UN agency, whose new report is based on the IMF's April 2025 'World Economic Outlook.' The IMF also singled out new tariffs and a 'highly unpredictable environment.' Read More U.S. stocks rose sharply Tuesday, with the S&P 500 climbing over 2%, the Nasdaq gaining 2.5%, and the Dow Jones Industrial Average rising 740 points, or 1.8%, in a rebound from last week's selloff. Read More For the latest news, Facebook, Twitter and Instagram. 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
