FX.co ★ Japan 10-Year Yield Falls Amid Govt Efforts to Stabilize Market

Japan's 10-year government bond yield dipped to approximately 1.46% on Tuesday, marking the third consecutive session of declines. This trend follows reports that the Japanese government intends to scale back the issuance of super-long bonds in a bid to stabilize the market. The Ministry of Finance is reportedly evaluating changes to its bond issuance strategy for the current fiscal year, which could involve reducing the supply of super-long bonds. This consideration arises after last week's 20-year bond auction experienced the weakest demand in over a decade, intensifying concerns about the forthcoming 40-year debt sale. Concurrently, the Governor of the Bank of Japan, Mr. Ueda, reaffirmed their preparedness to "adjust the degree of monetary easing as needed" to achieve the bank's inflation targets. He also cautioned about potential upward risks to core inflation due to high food prices. These concurrent signals from fiscal authorities and the central bank have alleviated some pressure on Japan's long-term bond yields, although market participants continue to exercise caution regarding future supply-demand dynamics.