Japan Yields Slip on Strong Demand at Bond Auctions

Japan's 10-year government bond yield retreated from 30-year highs on Wednesday as strong demand for government debt in this week's auctions alleviated market concerns.

The auctions for Japan's 2- and 40-year government bonds saw better-than-expected demand, with elevated yields encouraging investors to buy.

Despite expectations that the Bank of Japan will continue raising interest rates to contain persistent inflation, a former BOJ official said this week that the central bank could raise its benchmark rate for a second consecutive meeting in October.

The latest 40-year bond sale attracted its strongest demand since 2020, while the 2-year auction recorded firmer demand than its 12-month average.