08:18 AM EDT, 05/27/2025 (MT Newswires) -- The Japanese government bonds (JGB) long-end is the key mover on Tuesday as 30s rallied by 19bps and 10s were 5bps richer, said Scotiabank.

That's motivating carry influences into other long-ends such as the United States 30-year yield that's down 7bps early Tuesday, noted the bank.

The yen (JPY) is the worst-performing cross against the US dollar (USD) on a generally strong session for the USD, stated Scotiabank.

The catalyst is a sign from the ministry of finance (MoF) that Japan is considering a decrease in long-bond issuance given recently tepid demand and rising yields, pointed out the bank. The reason for such speculation appears to be traced back to a questionnaire sent by the MoF to market participants asking for views on issuance and market conditions which was treated as unusual.

The JGBs front-end was anchored, however, after Bank of Japan Governor Kazuo Ueda dug in on relatively hawkish rate guidance by reaffirming he thinks Japan is on the longer-run path toward achieving its sustainable 2% inflation goal, added Scotiabank.

Still, markets don't have a full 25bps hike priced this year with about half a hike priced by October and a little more priced for the December meeting, according to the bank.