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Japan's super-long bonds briefly change course to fall after weak auction
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Japan's super-long bonds briefly change course to fall after weak auction
Jun 24, 2026 11:12 PM

TOKYO, June 25 (Reuters) - Japan's super-long-dated bonds

briefly changed course on Friday to trade lower after an auction

of 20-year bonds drew weak demand due to fiscal concerns.

Here are a few details:

* The 20-year bond yield reversed course to

rise as high as 3.565%. The yield was last down 3 bps at 3.535%.

Yields move inversely to bond prices.

* At the auction, a measure of demand called the

bid-to-cover ratio, which gauges total bids against the amount

of securities on offer, fell to 2.97, the lowest since May 2025,

from 4.01 at the previous sale in May.

* Worries about a rise in government spending grew after

Japan on Wednesday announced a 370 trillion yen ($2.3 trillion)

investment in its new growth strategy, said Katsutoshi Inadome,

a senior strategist at Sumitomo Mitsui Trust Asset Management.

* "Concerns about the expansion of spending weighed on the

auction outcome, and also the decline in yields earlier in the

session hurt demand," Inadome said.

* The government said the investment would be made through

fiscal 2040 across 17 strategic sectors, such as AI and chips.

* Japanese Prime Minister Sanae Takichi's aggressive

spending has plan been a drag for bond prices.

* The 10-year JGB yield was down 3.5 bps to

2.63%.

* Declines in yields on shorter-dated bonds were supported

by the fall in oil prices, which eased inflation concerns,

strategists said.

* The market shrugged off comments from a hawkish Bank of

Japan board member Naoki Tamura that the central bank should

raise rates once every few months and stand ready to speed up

the pace of hikes.

* "There was no surprise in his comments," said Naoya

Hasegawa, chief bond strategist at Okasan Securities.

* The 30-year yield also reversed course soon

after the auction outcome, rising as high as 3.875%. The yield

was last down 3 bps at 3.835%.

(Reporting by Junko Fujita; Editing by Sherry Jacob-Phillips

and Subhranshu Sahu)

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