Strong Demand for Japan’s 40-Year Government Bond Auction as Yields Rise to 3.84%, Amid Middle East Tensions and Oil Price Increases
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The bid-to-cover ratio reached 2.70 in Wednesday’s sale, an improvement from 2.54 in the previous auction and 2.47 on average over the last 12 months. According to a Bloomberg report, the bonds yielded 3.84%, compared to 3.6% from the previous sale, and close to the predicted yield of 3.85%.
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This came as oil prices continued to climb, driven by ongoing uncertainty regarding a potential agreement to reopen the Strait of Hormuz. Hours after President Donald Trump suggested that negotiations with Tehran over an interim deal were progressing, US and Israeli forces attacked Iranian vessels in the waterway and other targets.
After reaching a record high of 4.355% earlier this month, the 40-year yield was last seen trading at 4.09%.
Prime Minister Sanae Takaichi’s announcement that the government will fund its supplemental budget without increasing bond issuance on a calendar-year basis has eased supply concerns.
(Edited by : Juviraj Anchil)
