Firmer Japanese 40-Year Bond Sale Brings Some Relief to Market

Japan’s 40-year bonds gained after a sale of that tenor met firmer demand, as an increase in yields attracted investors despite ongoing fiscal worries about Prime Minister Sanae Takaichi’s stimulus package.

The average bid-to-cover ratio, a key gauge of demand at the sale of the longest-maturity Japanese government bond, was 2.59 compared with a 12-month average of 2.48. Following the auction, the 40-year yield traded one basis point lower to 3.68% after being higher earlier, while bond futures briefly erased losses before dipping again.