Demand for 5-year government bond auctions is weak, and short-term Japanese government bonds are falling.

After weak demand for the five-year sovereign bond auction by the Japanese Ministry of Finance, short-term Japanese government bond prices fell. The bid-to-cover ratio, a measure of bond auction demand, was 3.11, lower than the 3.22 at the five-year bond auction in May. Another sign of weak demand is that the tail difference for this auction was 0.06 yen, higher than the 0.04 yen at the previous five-year bond auction, and the largest price difference since October 2025. The two-year Japanese government bond yield increased by 1 basis point to 1.415%, compared to no change before the auction. The yield on the five-year government bond reversed its earlier decline, rising by 1 basis point to 1.915%.