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Japanese bonds of longest date joined on Tuesday after the government touched the rare step of the primary collaboration dealers and other market participants due to their views on the issuance, which increases the speculation that it can reduce the supply.
The Japanese Ministry of Finance Ministry seemed designed to restore calm to a bond market that has been accumulated by volatility in recent weeks, with increasing indebtedness costs to register maximums last week.
The bail of the 30 -year -old Japanese government bond, which reached 3.2 percent last week, fell 0.19 percentage points to 2.85 percent on Tuesday. 10 -year yield fell 0.05 percentage points to 1.46 percent. The yields move inversely to prices.
The questionnaire was sent to a wide range of main corridors, according to two people familiar with the situation, and sought comments on the current market situation.
They said it seemed designed to confirm that the demand for super long bonds was structurally low, as a precursor to a possible government decision to withdraw the emission.
Japanese returns have increased precipitously in recent months, with the 30 -year yield that increases above 3 percent last week. A weak bond auction This weakened fears about the low demand for a longer sovereign debt.
Althhehoug, the jump last week in bonds to the at the same time occurred as part of a global liquidation sale, several factors have added to the sale pressure in Japan.
The Bank of Japan last year, the massive bond purchase program decreased as part of the country’s long battle against disadvantage. But as the Central Bank has reduced purchase persecutions, it does not have a strong increase in the demand of other traditional buyers, in particular Japanese life insuranceers.
The “buyers” strike, as some merchants have described, were clear last week when a 20 -year -old JGB auction was with the lowest demand level in a decade. Concerns on the gross national debt of Japan have also increased, which represents more than 200 percent of GDP.
The analysts noticed, they thought, that a group of unusually filled auctions in long -standing JGB also created an excess of short -term supply.
MUFG analysts pointed out that the decision of the Ministry of Finance to send the questionnaire “may well reflect an increase in Conerns on yields after the poor 20 -year auction last week and a 40 -year -old bond auction tomorrow.”
The US government bonds. UU. They also joined on Tuesday, and the 30 -year -old treasure produces a yield of 0.07 percentage points to 4.96 perce
“The questionnaire seems to be part of a strategy of the Japanese authorities to prepare the market for a temporary scale of the super long JGB broadcast,” said a person from a person with the questionnaire.
“In other countries, you could get a clear advertisement from the government: Japan prefers to generate consensus and present itelf acting on the strength of the opinion of the broad base market,” added the person.
“Markets are receiving some relief from [finance ministry’s] The implicit messaging that the supply of the super long end can be trimmed, ”said Benjamin Shatil, a senior economist from JPMorgan.
“But the point of conflict here is still the side of the demand of the equation. With persistent inflation, adjustment of domestic lycuity and a BC committed to normalization, the longest perspective remains one of the highest Japanese yields.”
The Ministry of Finance did not immediately respond to a request for comments.