Japan's Ministry of Finance sold 10-year government bonds on 5 November at an average yield of 2.768%, 33.3 basis points below the previous 10-year auction on 6 October. The bonds carry a 3.1% coupon.
The numbers
The offering was ¥2.6tn. Competitive bids came to ¥6.34tn and the ministry accepted ¥1.97tn. The bid-to-cover ratio was 3.213x.
The highest accepted yield was 2.8%, above the 2.768% average. The source's materiality screen flags this as a wide tail, meaning the weakest accepted bid cleared noticeably above the average, and it also flags the move in average yield against October as large.
Two readings in one result
The two flags point in different directions. A bid-to-cover ratio above 3x and an average yield well below the October auction's would normally read as firm demand. A wide tail says the weakest accepted bids came in at noticeably higher yields than the average. The Ministry of Finance result gives the figures but no explanation for either.
The result also does not state the October auction's average yield, so the 33.3bps fall is the only comparison available from this disclosure.
For investors outside Japan, the ministry's 10-year auction is a regular public read on pricing and demand for Japanese government debt at the benchmark maturity. Each auction is a single data point, and this one carries both a sharp fall in average yield and a wide tail.