Japan’s Ministry of Finance sold treasury discount bills on Friday at a weighted average yield of 1.2803 percent, with the yield at the lowest accepted price at 1.2856 percent. The sale drew 10,869.1 billion yen of competitive bids against 2,529.1 billion yen accepted, a bid to cover ratio of about 4.3, with a further 770.9 billion yen allotted to JGB market special participants on a non-price-competitive basis.
The bills, issue number 1413, are issued on October 19 and mature on January 25, 2027, putting them squarely in the segment of the curve that prices the Bank of Japan’s next move. The ministry also announced the next bill auction for October 23.
Front end funding at these levels is now routine in Tokyo rather than exceptional: the week’s five year auction cleared at a 2.379 percent average yield, reported in this beat on Thursday, and bills at 1.28 percent extend the same picture to the shortest maturities. Demand holding above four times cover says the money market is clearing the government’s cash needs without indigestion while the Bank of Japan’s path stays debated.