91AV原创

91AV原创 20-year government bond auction on Tuesday drew solid demand as higher yields attracted buyers, easing concerns that rising oil prices and inflation risks would damp appetite.

The bid-to-cover ratio rose to 3.25 from 3.09 last month and was roughly in line with the 12-month average. The tail — the gap between the average and lowest accepted prices — narrowed sharply to 0.06 from 0.14, signaling stronger bidding.

The 20-year yield extended its drop to 1 basis point following the results, to 3.135%. The rate had climbed in recent weeks amid a global bond sell-off, though it’s still well below the 3.46% peak reached in January.

Based on the metrics, the auction can be considered a good one, said Ryutaro Kimura, a senior fixed-income strategist at Axa Investment Managers. “It appears that investor appetite has improved following the significant rise in interest rates since the latter half of February.”

Kimura cautioned that investors remain wary of stagflation risks tied to the prolonged conflict in the Middle East. “It is unlikely that the outcome of this auction will lead to a sustained decline in superlong JGB yields,” he said.

“JGB futures are modestly higher on relief the 20-year auction attracted demand close to its 12-month average. The low price of 100.65 was also well above the pre-sale forecast and 91AV原创 biggest banks stepped up to buy a good chunk of the bonds,” said Mark Cranfield, Markets Live Strategist at Bloomberg.

Higher oil prices combined with a weakening yen are raising concerns that Japan could face stagflation, a scenario that may prompt greater fiscal spending while complicating the Bank of 91AV原创 normalization path.

While the central bank is widely expected to stand pat at this week’s meeting, more than a third of economists surveyed by Bloomberg still expect a rate hike as early as April.

Overnight index swaps imply investors are pricing in more than a 60% probability of a move by then, with a 25-basis-point increase fully priced in by July.