JGB Yields Increase as Investors Await Auction Results

TOKYO: Japanese government bond (JGB) yields with extended maturities experienced an increase on Monday. This shift occurred as investors exhibited apprehension regarding an upcoming auction intended to boost liquidity, which will assess the demand for these bonds.

The yield on the 20-year JGB increased by 3 basis points, reaching 2.275%.

The yield on the 30-year JGB also saw a rise, increasing by 5 basis points to reach 2.76%.

Naoya Hasegawa, the chief bond strategist at Okasan Securities, commented, “Should the liquidity-enhancing auction yield favorable results, investors will likely be encouraged to invest in bonds with very long maturities.”

Hasegawa further noted, “JGBs with these longer maturities have become relatively inexpensive due to significant sell-offs amidst considerable volatility in bond values.”

Upcoming Auction

The Ministry of Finance in Japan is scheduled to conduct an auction on Tuesday for bonds with maturities ranging from 15.5 to 39 years.

Earlier in the month, the yield on 30-year JGBs had reached a 21-year peak, mirroring a surge in US Treasury yields. This was driven by investors seeking to capitalize on market turbulence triggered by concerns over the effects of US tariffs.

The 10-year JGB yield saw a slight increase of 0.5 basis points, settling at 1.29%.

The five-year yield moved up by 1 basis point to 0.845%, while the two-year JGB yield edged up by 0.5 basis points to 0.635%.