Japan Bond Auction Shows Weaker Demand Amid Rate Hike Expectations
Update: 2025-11-28
Description
Japans recent bond auction revealed weaker demand due to anticipation of a Bank of Japan interest rate hike, as indicated by a lower bid-to-cover ratio and wider tail. The Japanese yens weakness has further fueled these expectations, with traders now pricing in a fifty-seven percent chance of a rate increase by next month. The yield on the two-year government bond has surged to its highest level since 2008, reflecting market anticipation of tighter monetary policy. Investors are eagerly awaiting Bank of Japan Governor Kazuo Uedas speech on Monday for clues about the timing of a potential rate hike, given recent strong economic data.
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