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2026-11-05 11:54:27
[Demand at Japan's 10-year government bond auction is robust, bid-to-cover ratio slightly below average, tail spread widens] (1) Demand at Japan's 10-year government bond auction on Thursday was largely in line with the average of the past 12 months, indicating that market demand remains robust despite recent yield declines. (2) The bid-to-cover ratio was 3.21, lower than the previous auction's 3.76 and slightly lower than the past 12-month average of 3.24; the tail spread, which measures the distribution of bid prices, was 0.25, higher than last month's 0.02. (3) With signs of recovery in domestic demand in Japan, coupled with inflows of funds from overseas investors supporting long-term government bonds, the benchmark 10-year government bond yield has fallen from a high of 3.115% in late September to 2.79%. (4) This auction comes at a time when US Treasury yields have fallen after the US midterm elections; the Democratic Party's victory in controlling both houses of Congress has eased market concerns about further expansion of US fiscal spending. (5) Meanwhile, international oil prices have also fallen as market expectations for the end of the Iran war have increased.
