Demand for Japanese 5-year treasury bonds auctions weakened slightly as investors remained cautious before the Bank of Japan meeting this month. The bid multiplier for Tuesday was 3.42, the last bid was 4.15, and the 12-month average was 3.44. Another sign of a weak market is that the margin widened to 0.04, up from 0.02 the previous time. After the bid results were released, the Japanese treasury bond futures price fell briefly. As investors increased their bets that the Bank of Japan would raise interest rates at the September meeting, the yield on Japanese treasury bonds had soared sharply. The yield on 5-year treasury bonds, which are more sensitive to monetary policy expectations, hit the highest level since the product was introduced earlier this month. “The results are slightly weak, but they are still within expectations,” said Miki Den, senior interest rate strategist at SMBC Nikko Securities. “The fall in early trading yields and large fluctuations in the exchange rate of the US dollar against the yen also prompted investors to choose to wait and see.”

Demand for Japanese 5-year treasury bonds auctions weakened slightly as investors remained cautious before the Bank of Japan meeting this month. The bid multiplier for Tuesday was 3.42, the last bid was 4.15, and the 12-month average was 3.44. Another sign of a weak market is that the margin widened to 0.04, up from 0.02 the previous time. After the bid results were released, the Japanese treasury bond futures price fell briefly. As investors increased their bets that the Bank of Japan would raise interest rates at the September meeting, the yield on Japanese treasury bonds had soared sharply. The yield on 5-year treasury bonds, which are more sensitive to monetary policy expectations, hit the highest level since the product was introduced earlier this month. “The results are slightly weak, but they are still within expectations,” said Miki Den, senior interest rate strategist at SMBC Nikko Securities. “The fall in early trading yields and large fluctuations in the exchange rate of the US dollar against the yen also prompted investors to choose to wait and see.”