Yield on 10-year JGB falls 2 bps to 1.48%

Yield on 10-year JGB falls 2 bps to 1.48%

Japanese government bond yields experienced a notable decline on Tuesday, with the 10-year yield dropping 2 basis points to 1.48%. This reversal follows a robust auction of 10-year securities, which saw the highest demand since April last year [1]. The auction results were described as "remarkably robust" by Mizuho's chief desk strategist, Shoki Omori [2].

The 10-year yield (JP10YTN=JBTC) decreased 3 basis points to 1.475%, as of 0528 GMT, after initially tracking an overnight rise among U.S. peers. Benchmark 10-year JGB futures (2JGBv1) gained 0.14 yen to 139.16 yen, reflecting the decline in yields [1].

The auction, which amounted to 1.96 trillion yen ($13.71 billion), saw a significant increase in the bid-to-cover ratio, a measure of demand. The ratio rose to 3.663 from 2.544 at the prior sale in May. This strong demand indicates that investors are showing renewed interest in Japanese government bonds [1].

The auction results have helped to calm investor nerves following recent poorly received bond sales, which had pushed Japan's longest-dated yields to record peaks. The Ministry of Finance has also announced plans to examine adjusting issuance to address supply-demand imbalances in super-long bonds [1].

While the 10-year yield fell, shorter-dated yields also saw a decline in sympathy with the 10-year note. The five-year JGB yield (JP5YTN=JBTC) lost 1 basis point to 1.02%, and the two-year JGB yield (JP2YTN=JBTC) remained flat at 0.75% [2].

Investors will closely watch the upcoming 30-year JGB auction on Thursday to gauge the market's appetite for longer-dated securities.

References:
[1] https://www.tradingview.com/news/reuters.com,2025:newsml_L2N3S602P:0-japanese-government-bond-yields-retreat-after-strong-10-year-note-auction/
[2] https://economictimes.indiatimes.com/markets/bonds/japanese-government-bond-yields-retreat-after-strong-10-year-note-auction/articleshow/121588526.cms