Japan's 40-year bond auction on Wednesday posted its strongest demand since
March 2025, with a bid-cover ratio of 2.82x versus 2.702x at the prior auction
and a 12-month average of 2.55x. JGB prices were largely unchanged after the
sale; the 40-year yield sits near 3.895%, down from a May peak of 4.355%.
Officials' comments that the Government Pension Investment Fund will lift
allocations to domestic financial assets were cited as support for the market,
but investors remain focused on Prime Minister Takaichi's expansionary fiscal
agenda, expectations that the BOJ will tighten policy only gradually, and
persistent interest-rate differentials.
