Record Demand for Japan's 20-Year Bonds as High Yields Attract Domestic Buyers

Demand for Japan's 20-year government bonds reached a record high, with higher yields drawing domestic investors back into the market. The auction received 5.84 times the issue amount, surpassing the previous auction's 4.01 times and the average of 3.73 times over the past 12 months. Another indicator of strong investor demand was a tail spread of 0.07 between the average winning price and the lowest winning price, down from 0.15 last month. Following the announcement of results, yields on Japan's 20-year bonds briefly fell by six basis points to 3.710%. Ryutaro Kimura, senior bond strategist at France Paribas Asset Management, said this 'positive result' reflects a recovery in domestic investor demand driven by 'high interest rates combined with easing fiscal concerns'.