JAPAN: Reaction To The BOJ
USD/JPY went into the BOJ announcement around 155.85(+0.25%) and the Nikkei futures(NHZ5) was around 49670(+0.75%).”BOJ RAISES OVERNIGHT CALL RATE TO 0.75%, CHANCE IS RISING FOR OUTLOOK TO BE REALIZED " - BBG. USD/JPY first traded a little lower but has quickly returned to challenge the 156.00-156.30 area.
- USD/JPY - 156.10(+0.35%)
- EUR/JPY - 182.95(+0.35%)
- CNH/JPY - 22.1800(+0.30%)
- Nikkei Futures - 49700.00(+0.80%)
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JGBS AUCTION: 20Y Supply Faces A Yield & A Curve At/Near Cyclical Highs
The Japanese Ministry of Finance (MoF) will today sell Y800bn of 20-Year JGBs. The MoF last sold 20-year debt on 15 October 2025.
- Today’s 20-year JGB auction offers an outright yield at its cycle high, 10-15bps above last month’s level.
- Moreover, the 10/20 yield curve remains near its recent high, its steepest since 1999.
- The 20-year JGB is at similar valuation to last month in terms of the 10/20/30 butterfly.
- On the other hand, the auction comes amid an improvement in sentiment toward long-term global bonds.
- Given these dynamics, it remains to be seen whether today’s supply can generate some positive momentum for JGB auctions or if market caution will weigh on demand.
- Results are due at 0335 GMT / 1235 JT.
Bloomberg Finance LP
JGBS AUCTION: Poll: 20-Year JGB Auction
*JAPAN 20Y GOVT BOND AUCTION MAY HAVE 98.60 LOWEST PRICE: POLL– BLOOMBERG
JGBS AUCTION: PREVIEW - 20-Year JGB Auction Due
The Japanese Ministry of Finance (MoF) will today sell Y800bn of 20-Year JGBs. The MoF last sold 20-year debt on 15 October 2025. The auction drew cover of 3.5599x at an average yield of 2.674%, an average price of 100.33, a high yield of 2.684%, a low price of 98.80, with 9.6410% of bids allotted at the high yield.
- Last month’s 20-year JGB auction drew demand that was stronger than its 12-month average. However, the bid-to-cover ratio was at 3.56x compared with 4.00x at the prior auction. Moreover, the auction tail lengthened to 0.13 from 0.10.
- Today’s auction also comes on the heels of lacklustre demand metrics observed in this month’s 30-year JGB auctions. The low price fell short of dealer expectations of 100.45, per the Bloomberg survey. Moreover, the cover ratio decreased to 3.1248x from 3.4110x and the auction tail lengthened significantly to 0.27 from 0.17, indicating a deterioration in bidding strength.
