TOKYO: Japanese government bond yields jumped on Tuesday as investors sold the securities after poor results at an auction of 20-year bonds spurred worries about demand for super-long debt.
The 10-year JGB yield vaulted 4.5 basis points (bps) to 1.525%, its highest level since March 28, after the finance ministry announced the results of the sale in the early Tokyo afternoon.
Benchmark 10-year JGB futures were last down 0.19 yen at 139.06 yen.
Bond yields move inversely to prices. The 40-year yield surged 10 bps to 3.55%, the highest level since the debt’s inception in 2007.
The 20- and 30-year bonds, as well as the two-year note, had yet to trade following the release of the auction details.
JGB yields with super-long maturities jump ahead of auction
Mizuho strategist Shoki Omori called the auction results “lacklustre”, “highlighting persistent supply-demand softness in the super-long sector and fueling concerns over who, if anyone, will step in to buy.”
Brokers and investors “appear reluctant to hold inventory, raising the likelihood of a sell-off spiral that extends beyond the 20-year tenor into both the 10-year and 30-year markets,” Omori said.
The five-year yield rose 1.5 bps to 1.01%, the highest since April 2, when US President Donald Trump announced his “Liberation Day” tariffs.
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