Japan 40 year government bond auction sees strong demand as yields rise to 3.84%, despite Middle East tensions, oil price gains and attacks on Iranian ships
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The bid-to-cover ratio was 2.70 in Wednesday’s sale, up from 2.54 at the previous auction and 2.47 on average for the previous 12 months. According to a Bloomberg report, the bonds yielded 3.84%, compared to 3.6% in the previous sale and the highest yield estimate of 3.85%.
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The outcome occurred while oil prices continued to rise due to ongoing uncertainty about a possible agreement to reopen the Strait of Hormuz. Just hours after President Donald Trump hinted that talks with Tehran over an interim deal were moving forward, US and Israeli forces attacked Iranian ships in the channel and other targets.
After hitting a record high of 4.355% earlier this month, the 40-year yield was last trading at 4.09%.
Prime Minister Sanae Takaichi’s announcement that the government will finance its supplemental budget without raising bond issuance on a calendar-year basis has allayed supply concerns.
(Edited by : Juviraj Anchil)
