US Treasury yields climb as Japan's 10-year bond hits 2.935%
US Treasury yields rose across the curve on Wednesday, pushing the 10-year yield to 4.84%. This movement pressured Japanese government bonds, with the 10-year JGB yield briefly touching 2.935% before settling at 2.910%.
US Treasury yields increased across all maturities on Wednesday. The 10-year yield climbed 5.24 basis points to reach 4.8406%. The 30-year yield gained 4.34 basis points to finish at 5.2889%. The 2-year yield rose 3.59 basis points to 4.4295%. The 5-year yield advanced 5.36 basis points to 4.6163%. Selling pressure was most pronounced at the long end of the yield curve.
Japanese government bond markets followed suit on Thursday. The benchmark 10-year JGB yield settled at 2.910%, up 0.030 percentage points. During the session, the yield briefly spiked to 2.935%. This level represents a recent high for the instrument. Traders cited the overnight rise in US Treasury yields as the primary driver of local selling.
Buyback program falls short of expectations
The US Treasury Department released its buyback schedule for Wednesday. The plan triples the buyback of 10-to-20-year Treasuries to $6 billion. The 20-to-30-year buyback doubles to at least $4 billion. Investors had anticipated a more aggressive repurchase program. The actual figures disappointed market participants. Treasury prices declined immediately after the release. Yields pushed higher as a result of this perceived lack of commitment.
Heavy corporate issuance strains demand
Supply-side pressure intensified from the corporate bond market. Sixteen companies raised a combined $22.75 billion on Wednesday. This followed a previous session where 18 issuers raised $38.6 billion. Two consecutive days of massive issuance crowded out investor demand for government debt. The volume made it difficult for the Treasury market to absorb new supply. This dynamic contributed to the upward movement in yields.
Auction results show strong institutional demand
The 10-year note auction delivered a positive signal despite the broader rally in yields. The awarded yield came in at 4.834%. This was lower than the when-issued yield of 4.849% at the bidding deadline. The bid-to-cover ratio reached 2.71 times. This is the highest level since 2016. Primary dealers received only 4.3% of the auction. Indirect bidders took 79.25% of the offering. This structure suggests strong interest from foreign central banks and large institutions. GN auto markets/bonds: treasury yields reported these figures as evidence of steady buying support.
