Record demand for 20-year Japanese bonds
The 20-year Japanese bond auction recorded its strongest demand ever, with a coverage ratio of 5.84 times. This reflects a rebound in domestic demand for the bond market following yield increases to attractive levels. As a result of this strong demand, the bond yield decreased by 6 basis points to 3.71%. This heightened interest is attributed to rising interest rates and declining financial concerns, with investors—including insurance companies—continuing to purchase long-term bonds. Markets are also anticipating that the Bank of Japan will maintain its gradual monetary tightening approach, ahead of next week’s central bank meeting.
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