Japan’s 10-year government bond yield fell to around 2.12% on Tuesday, its lowest level in more than a month, after a well-received auction of 5-year notes eased worries about the country’s fiscal outlook. Investors are now looking ahead to a 20-year bond sale later this week for further indications of demand.
Top fund manager Mark Nash bought 10-year JGBs after closing a long-held short position, pointing to reduced political uncertainty following Prime Minister Sanae Takaichi’s landslide general election victory.
Meanwhile, former Bank of Japan board member Saiji Adachi said on Monday that the central bank is likely to raise its benchmark rate in April, by which time sufficient data should be available to justify such a move. BOJ Governor Kazuo Ueda also noted that Prime Minister Takaichi made no specific requests during their regular meeting on Monday, reassuring markets that she is unlikely to interfere with the BOJ’s policy normalization plans.
