Japan’s 20-year government bond auction drew demand that was weaker than its 12-month average, reflecting investor caution about longer dated debt facing fiscal risks like higher government spending and tax cuts.
The sale saw a bid-to-cover ratio of 3.09, compared with 3.15 at the previous auction and a 12-month average of 3.24. Japan’s bond futures extended losses and yields rose after the result. The nation’s longer-maturity bonds have been in sharp focus after the ruling coalition lost its majority at last month’s upper house election.