Next week's auctions of 10-year and 30-year Japanese government bonds could become a fresh risk to the US Treasury market and challenge efforts by US Treasury Secretary Scott Bessent, who is trying to bring down the government's long-term borrowing costs. Japan is scheduled to auction 10-year bonds on September 1 and 30-year bonds on September 3, amid a climate in which investors worldwide are demanding higher yields to compensate for the risk of lending to governments. If the auctions draw weaker-than-expected interest, Japanese government bond prices could fall and yields rise, before the pressure spreads to the US Treasury market, where 30-year yields are currently near their highest levels in almost 20 years. Strategists from Nomura, Okasan Securities and SMBC Nikko Securities have all warned that weak auction results could trigger a fresh round of bond selling and push US yields even higher. Although Bessent announced a plan last week to expand buybacks of long-dated US government bonds, the positive effect did not last long, with yields resuming their upward trend the following day.
Sumitomo Mitsui Financial Group, Inc.
Nomura Holdings, Inc.
Okasan Securities Group Inc.
NOMURA CORPORATION
NOMURA Co., Ltd.
