Japan’s five-year debt auction on Wednesday will be the first test of the market’s appetite for new government bonds since Prime Minister Shigeru Ishiba said he will step down.
Investors are expecting decent demand as domestic political uncertainty fuels debate on whether the Bank of Japan will slow the pace of interest-rate hikes. The five-year bond yield, which is sensitive to monetary policy expectations, was at 1.095% on Tuesday, near the lowest since mid-August.