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2026-05-25 17:37:01
[Hopes for US-Iran peace talks ignite Japanese bond yields, pushing them below key levels as short sellers flee] ⑴ Japanese government bond futures rose throughout Monday as hopes for a US-Iran peace agreement eased inflation concerns. The benchmark 10-year yield fell 3 basis points to 2.73% in the morning session and continued to decline, breaking below the 2.70% level in the afternoon for the first time since May 15. ⑵ Futures opened at 128.16, up 22 ticks from Friday, and quickly broke through resistance levels at 128.20 and 128.40, reaching a daily high of 128.51 around 2 pm. ⑶ Longer maturities performed particularly strongly, with 16-17 year yields falling 9 basis points, a larger drop than 10-year and 30-year yields. Low-coupon, less actively traded bonds, such as the 0.4% 2050 government bond, rose about 15 basis points on the day. (4) Japanese securities traders revealed that today's rise was more due to short covering than active buying by investors. Most clients were unwilling to enter the market when yields were falling, resulting in thin trading. (5) Japan's Ministry of Finance auctioned 250 billion yen in five-year transitional bonds on Tuesday, with a winning bid rate of 1.941%. The bid-to-cover ratio rose to 4.62 from 3.49 in the previous auction in January.
