(Bloomberg) — Japan’s auction of 30-year sovereign notes met decent demand on Thursday as rising yields after turmoil in global debt markets lured long-term investors.
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The average bid-to-cover ratio for the debt rose to 3.47, the highest in two months, in the sale by the Ministry of Finance of ¥900 billion ($6.1 billion) of benchmark bonds maturing in June 2054. The lowest price accepted was ¥99.3, exceeding the ¥99.15 forecast by market participants.
But the tail, or gap between average and lowest-accepted prices, came in at 0.17, the widest in three months in a sign that demand hasn’t recovered completely.
Even as global bonds rallied this week on bets that the Federal Reserve and other central banks will cut interest rates, longer Japanese notes have dropped on concern borrowing costs are headed higher in Japan. The 30-year auction follows a weak sale of benchmark 10-year sovereign notes on Tuesday, after yields plunged in the wake of a Bank of Japan rate hike that was one of the factors that rattled global markets.
Also read: Japan Morphs Into the Center of Worry for Global Investors
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