TOKYO: The longest-dated Japanese government bond yields soared to record highs on Tuesday as poor results at an auction of 20-year debt spurred worries about demand for so-called super-long securities.

The 20-year JGB yield vaulted as much as 15 basis points (bps) to 2.555%, the highest since October 2000, after the finance ministry announced the auction results in the early Tokyo afternoon.

The 30-year JGB yield jumped 13 bps to a record 3.10%, while the 40-year yield surged 14 bps to 3.59%, the highest since the debt’s inception in 2007.

The 10-year JGB yield climbed 4.5 bps to 1.525%, its highest level since March 28.

Mizuho strategist Shoki Omori called the auction results “lacklustre”, “highlighting persistent supply-demand softness in the super-long sector and fuelling concerns over who, if anyone, will step in to buy.”

Brokers and investors “appear reluctant to hold inventory, raising the likelihood of a sell-off spiral that extends beyond the 20-year tenor into both the 10-year and 30-year markets,” Omori said.

The five-year yield rose 1.5 bps to 1.01%, the highest since April 2, when U.S. President Donald Trump announced his “Liberation Day” tariffs.

The two-year JGB yield added 1.5 bps to 0.73%, the highest since April 3.

Benchmark 10-year JGB futures fell as much as 0.47 yen to 138.78 yen, the lowest since April 2. Bond yields move inversely to prices.

Reuters