After early gains pushed the 10-year JGB yield down 1.5 basis points to 2.790%, Japan's roughly 600 billion yen 30-year bond sale showed softer super-long demand despite still-attractive yields.
Japan's government bond market opened firmer in Tokyo on August 6, tracking overnight gains in U.S. Treasurys, with the 10-year JGB yield down 1.5 basis points to 2.790% at 0014 GMT before attention shifted to a roughly 600 billion yen 30-year auction. Citi Research's Tomohisa Fujiki had said demand was likely to come from life insurers and that yields should be sufficient for regular purchases, but the Ministry of Finance sale was later viewed as "slightly weak" after a lower bid-to-cover ratio than the previous auction, a much wider 21-sen tail and a lowest accepted price below forecasts. September JGB futures reopened at 127.28 yen after the midday break and later pared gains to 127.24 yen, while the results pointed to cautious demand in super-long bonds and the potential for higher 30-year yields as markets watch Bank of Japan policy normalization.