Overview

• Finance Minister Katsunobu Kato said the government will maintain close dialogue with investors and monitor market developments ahead of the 40-year bond sale.
• Reports suggest the Ministry of Finance may trim issuance of 20- to 40-year bonds, triggering an 18.5 basis-point drop in 30-year yields to 2.85%.
• Tokyo plans to tap a ¥388 billion reserve fund for an emergency economic package to offset the impact of new U.S. import tariffs on industries and households.
• Investor uncertainty has intensified as the Bank of Japan prepares to review its quantitative tightening programme and decide on the pace of bond purchases.
• Traders will scrutinize Wednesday’s ¥500 billion auction for bid-to-cover ratios as a key gauge of demand for the nation’s longest-dated debt.