Japan 20-Year Bond Sale Meets Strong Demand on US Yield Drop
- Minimum bid price was higher than forecast, tail was smaller
- JGB bears may turn to buying after results, Inadome says
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Japan’s auction of 20-year government bonds met with strong investor demand as long-term US debt yields continued to fall and the yen’s strengthening cooled speculation that a central bank policy change was imminent.
The minimum bid price for bonds due in two decades was ¥101.05 on Tuesday, higher than market forecast of ¥101, suggesting that investors were willing to pay more for the debt. The bid-to-cover ratio was 3.54, higher than the previous auction. The tail, the difference between the average bid price and the minimum bid price that indicates a strong bid if it’s small, was ¥0.14, lower than the previous auction.