JGBs rise after US Treasury acts to bring down borrowing rates; 20-year debt sale awaited

• The benchmark 10-year JGB yield JP10YTN=JBTC dropped 5 basis points (bps) to 2.84%. The 20-year yield JP20YTN=JBTC slid 7.5 bps to 3.7%. Yields move inversely to bond prices.
• Long-dated U.S. Treasuries rallied on Wednesday after the Treasury Department said it would double the size of liquidity support buyback operations for longer-dated notes and bonds.
• Japan's Ministry of Finance will sell 20-year bonds later in the session. On Tuesday, an auction of 5-year JGBs saw the highest level of demand since June 2025.

Japanese government bonds (JGBs) rallied on Thursday ahead of a sale of 20-year debt and after the U.S. Treasury took action to bring down long-term borrowing rates.

Here are a few details:

• "While the 20-year bond auction is expected to yield a solid result, the upside potential for the market appears limited amid lingering uncertainty regarding monetary and fiscal policies as well as inflation trends," Takayuki Miyajima, senior economist at Sony Financial Group, said in a note.
• Long-term borrowing costs from the U.S. to Germany and Japan hit their highest in decades earlier this week, reflecting concerns about ballooning government debt and inflation caused by persistently high oil prices amid the Middle East conflict.
• The two-year yield JP2YTN=JBTC, the one most sensitive to Bank of Japan policy rates, and the five-year yield JP5YTN=JBTC both held steady.