“连续多日无人出价”，日债拍卖接连崩盘

Core Viewpoint - The Japanese government bond market is experiencing significant turmoil, with recent auctions showing unprecedented low demand and raising concerns about fiscal sustainability and potential buyer strikes [2][3][9]. Auction Results - The Japanese Ministry of Finance auctioned 500 billion yen (approximately 35 million USD) of 40-year bonds, resulting in a highest bid yield of 3.1350%, exceeding market expectations and marking the highest level since issuance began in 2007 [2]. - The auction for 20-year bonds the previous week recorded the lowest bid-to-cover ratio since 2012 at 2.5 times, with the tail spread reaching its highest level since 1987 [2][3]. Market Reactions - Following the poor auction results, yields on various maturities surged, with the 40-year bond yield reaching 3.399%, a 1.32% increase from the previous day [3]. - The futures market also saw significant sell-offs, with the June bond futures contract dropping to 138.86 yen [8]. Investor Sentiment - There is a growing concern among investors regarding the sustainability of Japan's fiscal policies, particularly in light of rising long-term bond yields and the potential for reduced issuance of long-term bonds [7][9]. - The Bank of Japan's recent actions, including a potential reduction in bond purchases, have contributed to a perception of instability in the bond market [13]. Supply and Demand Dynamics - The decline in demand for long-term bonds is attributed to the Bank of Japan's reduced purchasing, leading to a supply-demand imbalance [9]. - Major domestic investors, including life insurance companies and banks, have decreased their holdings in long-term bonds, further exacerbating the demand issue [14]. Global Implications - The turmoil in Japan's bond market may have broader implications, as rising long-term yields are observed in other developed economies, indicating a global trend of increasing fiscal sustainability concerns [16][17]. - Analysts warn that if Japanese interest rates rise significantly, it could lead to forced selling of foreign assets, potentially tightening global liquidity [17].