Group 1 - Japanese government bond prices have risen due to strong demand in the 20-year bond auction, which recorded the best demand ratio in five years as rising yields attracted investors [1] - The bid-to-cover ratio increased from 3.28 last month to 4.1, while the tail spread reached its strongest level in 2023, indicating robust demand [1] - The 20-year bond yield fell by 4.5 basis points to 2.9%, reflecting a downward trend across all maturities [1] Group 2 - The auction results were bolstered by expectations of a reduction in the upcoming fiscal year's bond issuance and a recent decline in U.S. Treasury yields [1] - The Japanese government is attempting to minimize the impact on the ultra-long bond market by increasing short-term bond issuance, despite a significant extra spending plan announced by Prime Minister Fumio Kishida [1] - Market participants are closely monitoring the next fiscal year's budget announcement for potential increases in bond supply and any signals from the Bank of Japan regarding future rate hikes [1] Group 3 - The final long-term Japanese government bond auction of the year showed strong results, with the highest bid-to-cover ratio of the year and a narrowing tail spread [2] - There is an increased expectation for the Bank of Japan to raise rates by 25 basis points at the upcoming policy meeting on December 19, contingent on economic and financial market stability [2] - The overnight index swap indicates a 90% probability of a rate hike, following the Federal Reserve's recent rate cut, which has improved the global bond outlook [2]