Japan 5-Year Bond Sale Weakest Since August on Election Risk

Japan’s five-year government bond auction drew the weakest demand since August as expectations that Prime Minister Sanae Takaichi will call a snap election reinforced concerns over increased debt issuance.

Bond futures slid after the sale’s bid-to-cover ratio came in at 3.08, down from 3.17 at the previous offering in December and below the 12-month average of 3.54. Ahead of the results, yields on five-year bonds rose to 1.615%, the highest since the debt’s debut in 2000.