Japan’s five-year government bond auction saw the lowest demand since 2020 amid the prospect of tighter monetary policy and renewed concerns over poor market liquidity.
The sale nudged bond prices lower across maturities from two- to 20-years, and yields on five-year securities rose as much as 3 basis points to 1.07% before easing slightly. The bid-to-cover ratio was 2.96, compared with 3.54 at the prior sale and the 12-month average of 3.74.