Japan 2-Year JGB Auction Sees Weakest Demand Since 2009

Japan’s Ministry of Finance garnered the weakest demand for a two-year government bond sale in 16 years, underscoring investor caution ahead of potential shifts in monetary policy. Thursday’s auction drew a bid-to-cover ratio of 2.84, sharply lower than the 4.47 registered at the previous sale and the lowest since September 2009. The ministry sold ¥2.039 trillion ($13.9 billion) of notes at an average yield of 0.863%. The gap between the lowest accepted and average prices, known as the tail, was the widest since 2023, adding to evidence of soft demand.