Japans Bonds Have Biggest Drop in Two Months Before Auction
Published May 24th, 2007
Japan’s 20-year bonds had their biggest decline since March on speculation traders will sell to protect against potential losses at an auction tomorrow.
Brokerages often reduce holdings before government sales in case yields rise before they can pass on the new debt to investors. The yield spread between 20-year bonds and two-year notes dropped to the lowest since 2003 yesterday. A decline in U.S. Treasuries that pushed 10-year yields to the highest in three months yesterday also dimmed the allure of Japanese securities.
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