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Mixed Results For Today’s 2Y Supply

JGBS
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The 2-year bond supply has demonstrated mixed demand metrics, as the low price met dealer expectations, which had been projected at 99.985, as per the BBG poll, but the cover ratio declined to 3.481x from 4.072x in March. The auction tail was unchanged from last month.

  • With today's auction occurring at an outright yield around its highest level since 2009, the outcome underscores the influence of uncertainties surrounding the BoJ policy outlook on demand.
  • Indeed, today’s outcome is likely to be perceived as disappointing, especially considering the optimistic tone set by other JGB auctions in April. These auctions had provided relief to a market that had been under pressure since mid-December, driven by expectations of policy tightening from the BoJ.
  • It's worth noting, however, that today’s auction occurred amidst speculation of the BoJ's Policy Decision on Friday, casting a shadow over market sentiment.
  • There has so far been little reaction in the cash yield in post-auction trade.
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The 2-year bond supply has demonstrated mixed demand metrics, as the low price met dealer expectations, which had been projected at 99.985, as per the BBG poll, but the cover ratio declined to 3.481x from 4.072x in March. The auction tail was unchanged from last month.

  • With today's auction occurring at an outright yield around its highest level since 2009, the outcome underscores the influence of uncertainties surrounding the BoJ policy outlook on demand.
  • Indeed, today’s outcome is likely to be perceived as disappointing, especially considering the optimistic tone set by other JGB auctions in April. These auctions had provided relief to a market that had been under pressure since mid-December, driven by expectations of policy tightening from the BoJ.
  • It's worth noting, however, that today’s auction occurred amidst speculation of the BoJ's Policy Decision on Friday, casting a shadow over market sentiment.
  • There has so far been little reaction in the cash yield in post-auction trade.