Japan’s Ministry of Finance sold six month treasury discount bills on Monday at yields that would have been unthinkable before the Bank of Japan’s tightening cycle. The issue, dated November 10 and maturing May 10, 2027, drew 8,433.20 billion yen of competitive bids, of which 2,319.58 billion yen was accepted at a lowest accepted price of 99.310 per 100 yen, a yield of 1.4011 percent, with a weighted average price of 99.318, a yield of 1.3847 percent. A further 680.40 billion yen was allotted through the non price competitive auction for market special participants, and bids at the lowest accepted price were filled at 40.2950 percent.
The same morning, the ministry reported that Japan’s reserve assets totaled 1,179,119 million dollars at the end of October, up 723 million dollars from the end of September. Foreign currency reserves were 985,228 million dollars, of which 834,555 million was in securities and 150,673 million in deposits, mostly with foreign central banks and the Bank for International Settlements. Gold was valued at 106,437 million dollars on a volume of 27.20 million fine troy ounces, alongside an IMF reserve position of 11,167 million dollars and special drawing rights of 60,627 million dollars. The near flat monthly change, following the ministry’s disclosure of zero foreign exchange intervention from September 29 to October 28, confirms October passed without official resistance to the yen, which closed Friday at 157.96 per dollar in this site’s market tables.
The ministry also set the month’s inflation linked sale. About 250 billion yen of 10 year inflation indexed JGBs will be auctioned on November 16 and issued on November 17, maturing March 10, 2036, as a reopening of the May 2026 issue under a Dutch style price competitive format. The sale is small against Japan’s issuance mountain, but it is the market’s cleanest monthly read on long term inflation compensation as the Bank of Japan’s December 17 to 18 meeting approaches.