TOKYO: Japanese government bond (JGB) yields rose on Tuesday, following a weak show of demand at an auction for 10-year bonds as investors took a cautious approach ahead of remarks by Bank of Japan (BOJ) Deputy Governor Shinichi Uchida.
The 10-year JGB yield was last 1.5 basis points (bps) higher at 1.42%, while 10-year JGB futures fell 0.08 points to 139.36 yen.
The bid-to-cover ratio, a common measure at auctions where a large number indicates more demand, came in at 2.66, its lowest since October 2021, and was down from 3.18 in February.
“It’s quite a tough week for two auctions, particularly when monetary policy expectations are kind of moving around,” said Naka Matsuzawa, chief macro strategist at Nomura, ahead of the results. An auction for 30-year JGBs will take place on Thursday.
US President Donald Trump said on Monday that he told leaders of Japan and China they cannot continue to reduce the value of their currencies as doing so would be unfair to the United States.
His criticism of yen weakness, as well as the impact of tariff policies on the global economy, stirred questions about how soon the BOJ will decide to raise interest rates again.
That shone a spotlight on BOJ Deputy Governor Uchida, who will speak on Wednesday, with investors looking for any hints as to the pace and timing of the central bank’s next rate hike.
JGB 10-year yields hit 14-year highs as BOJ outlook weighed
Yields declined earlier in trade on Tuesday as investors bought bonds amid a risk-off mood, with 25% US tariffs on goods from Canada and Mexico, as well as an additional 10% levy on Chinese imports going into effect on Tuesday.
The 20-year JGB yield was up 1 bp at 2.06%, while the 30-year JGB yield rose 0.5 bp to 2.365%.
The two-year JGB yield also ticked up 0.5 bp to sit at 0.83%. The five-year yield climbed 2 bps to 1.06%.
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