“US Bond Market Falls as Rates Reach Highest Level Since March Amid Debt Ceiling Negotiations”

The bond market on the 24th fell in futures. In the United States, where negotiations over the debt ceiling continue, long-term interest rates temporarily reached the highest level since March, leading to selling against the background of upward pressure on overseas interest rates. The sale of super long-term bonds ahead of the 40-year government bond auction the next day is also a concern. On the other hand, the Bank of Japan’s regular government bond purchases will support the market.

Katsutoshi Inadome, senior strategist at Sumitomo Mitsui Trust Asset Management, said that the upward pressure on overseas long-term interest rates is strong, the selling pressure with a view to tomorrow’s 40-year auction, and the government’s countermeasures against the declining birthrate.Special deficit-financing bonds for children“The news of the issuance and all three will weigh on the bond market,” he said.

The US 10-year yield on the 23rd temporarily reached the 3.75% level, the highest level since early March, but turned downward due to concerns about the future of the economy due to the stagnation of the debt ceiling negotiations, and 2 basis points from the previous day. (bp) ended at around 3.69% as low.

U.S. Debt Ceiling Negotiations Still Unclear

Bank of Japan operation

• Covers maturities over 1 year and up to 3 years, over 3 years up to 5 years, over 5 years up to 10 years, and over 10 years up to 25 years.The previous purchase amounts were 425 billion yen, 500 billion yen, 575 billion yen, and 200 billion yen, respectively.
• We carry out unlimited purchases of 10-year government bonds at a yield of 0.5% every business day.Continuation of the operation targeting the cheapest issue eligible for delivery (Cheapest) used for settlement of bond futures
• Remarks: Bank of Japan outright purchase of government bonds

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