Just when you thought it was safe to BTFD your toe back into long-date Japanese debt, last night's 40-year auction shit the bed and sent yields higher once again...
“The weak bidding for the 40-year bond was probably due to the continued high volatility and the fact that the actual issuance amount will not be reduced for another month, making most investors reluctant to take on risk,” said Ataru Okumura, a senior interest-rate strategist at SMBC Nikko Securities.
The average bid-to-cover ratio, a measure of demand, for Wednesday’s ¥500 billion ($3.5 billion) auction of March 2065 bonds was 2.21. That was lower than 2.92 at the last auction in March.
