JGB yields extend rise after weak 10-year bond auction
- The benchmark 10-year JGB yield rose 4.5 basis points (bps) to 2.745%, its highest since May 22
TOKYO: Japanese government bond (JGB) yields extended their rise on Thursday as a weak auction of 10-year bonds highlighted investor concerns about heavier government spending.
Here are a few details:
The benchmark 10-year JGB yield rose 4.5 basis points (bps) to 2.745%, its highest since May 22.
Yields move inversely to bond prices.
The 30-year yield rose 4.5 bps to 4% ahead of an auction of that maturity next week.
“The 10-year bond auction was weak given the widening tail,” said Masahito Sugawara, a senior strategist at Daiwa Securities.
The auction’s tail, or the gap between the lowest accepted price and the average price, widened to 0.2 point from 0.05 point at the previous auction in June, indicating weaker demand.
“Investors are concerned if the government’s big spending plan would bring future economic growth,” said Sugawara.
In its growth plan, Japan will seek to work with the private sector to channel resources into strategic industries, with combined public and private investment projected to exceed 370 trillion yen ($2.28 trillion) through fiscal 2040.
The five-year yield rose 1.5 bps to 1.925%.‑Reuters
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