US Treasury 20-year yields decline after 20-year bond auction, last at 4.942%

US Treasury 20-year yields decline after 20-year bond auction, last at 4.942%

July 02, 2025

US Treasury 20-year yields declined following a 20-year bond auction, closing at 4.942%. The auction, which took place in the morning of July 2, 2025, saw a significant drop in yields compared to recent levels, indicating a shift in investor sentiment.

The 20-year bond auction was well-received, with investors showing strong demand for the securities. The auction yielded a 4.942% yield, which is lower than the previous yield of 5.123% from the last auction in June. The decline in yields can be attributed to several factors, including the recent U.S.-Japan trade deal and the broader trend of rising risk appetite in global markets.

The U.S.-Japan trade deal, which was announced earlier in the week, has been a significant driver of market sentiment. The deal includes a 15% tariff on Japanese goods and an agreement for Japan to invest $550 billion in the U.S. This trade deal has been seen as a positive development for global trade and has contributed to an increase in risk appetite among investors.

Additionally, the 20-year bond auction comes at a time when global sovereign bond yields have been rising, reflecting a broader trend of increasing risk aversion in global markets. However, the U.S. Treasury 20-year yield has managed to decline, suggesting that investors are still willing to invest in U.S. Treasuries despite the rising global yields.

The decline in yields is also supported by the recent performance of the U.S. economy. The June existing home sales data showed a contraction, which has led to expectations of a slowdown in the U.S. economy. This has contributed to a decrease in inflationary pressures, making U.S. Treasuries more attractive to investors.

Overall, the decline in US Treasury 20-year yields is a reflection of the complex interplay of global economic factors, trade negotiations, and investor sentiment. As the U.S. economy continues to evolve and global markets react to new developments, it will be important for investors to closely monitor the yield curve and adjust their investment strategies accordingly.

References:
[1] https://www.wsj.com/finance/jgb-futures-slide-dragged-by-u-s-trade-deal-with-japan-b53c37df
[2] https://www.wsj.com/finance/jgb-futures-slide-dragged-by-u-s-trade-deal-with-japan-b53c37df