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2026-05-27 17:06:36
[Japanese Government Bonds Show Late-Day Movement, Insurance Funds and Pension Funds Secretly Buy, Rushing to Buy Before Tomorrow's Trading] ⑴ Japanese government bond futures strengthened in late trading on Tuesday, with the main contract finally closing at 128.30, up 5 ticks from Monday, although it briefly fell to 128.15 during the session. The 10-year yield climbed to 2.73% in the morning before falling back, eventually dropping below 2.70% to 2.69%, while the 5-year yield closed down 3.5 basis points to 1.93%. ⑵ The auction results for 40-year government bonds today were stable. The compound yield of the newly issued 3.8% coupon JU19 bond was 3.84%, slightly lower than the 3.842% of the older JU18 bond at midday. The issuance size was 100 billion yen smaller than the previous one, with demand supported by orders from offshore accounts and three Japanese life insurance companies. However, the auction results did not exert downward pressure on longer-term bonds. Selling pressure emerged around 1:20 PM for the 20-year bond, with the yield briefly falling from 3.64% to 3.595%. (3) The market saw a significant rally in the last hour of trading, with ultra-long-term bonds strengthening in tandem. Analysts stated that purchases by Japanese pension accounts were the main driver of the afternoon rebound. Furthermore, the lack of active selling pressure in the market prior to the Bank of Japan's routine bond-buying operations on Wednesday also amplified the rise in government bonds.
