Japan bonds pare losses after strong auction, but fiscal worries weigh
TLT•Japanese government bonds pared early losses after demand at a 10-year note auction reached its highest level since May. The 10-year yield was up 1.5 basis points at 3.1%, while the 20-year yield was at 3.98% after reaching a three-decade high of 3.99%.
1. Bond yields retreat
Japanese government bonds pared early losses on Tuesday after strong demand at a 10-year note auction, the highest since May. The 10-year yield was up 1.5 basis points at 3.1% as of 0349 GMT.
2. Fiscal concerns persist
The 20-year yield pared its advance to 1 basis point, at 3.98%, after reaching a three-decade high of 3.99%. The 30-year yield was up 0.5 basis point at 4.235%, after rising to a record 4.24% earlier. Concerns about Prime Minister Sanae Takaichi’s expansionary fiscal policies and a French debt selloff weighed on sentiment.
3. Investors await Ueda
Takaichi pledged on Monday to “control” bond issuance and act swiftly against market turbulence. Investors were watching for a speech later Tuesday by Bank of Japan Governor Kazuo Ueda for clues on the pace of further interest rate hikes.
