Japan 30-Year Bonds Pare Gain on Widest Auction Tail Since 2013
- Bid-to-cover ratio falls to 3.39 from 4.12 last month
- Tail expands to 0.67, indicating lack of consensus about price
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Japan’s 30-year government bonds pared gains that had pushed yields to a record low, after an auction of the debt met weaker demand and showed a growing lack of investor confidence about what the price of the securities should be.
The Ministry of Finance’s sale of 800 billion ($7.3 billion) of 30-year notes on Thursday generated a bid-to-cover ratio of 3.39, down from 4.21 last month. The so-called tail, the gap between the lowest and the average price, expanded to 0.67, the widest level since the Bank of Japan introduced its “quantitative and qualitative” easing program in April 2013. The sale’s average yield fell to 0.388 percent, the lowest on record.