Japan sells JPY 400bln in 40-year JGBs; b/c 2.54x (prev. 2.76x), highest accepted yield 3.600% (prev. 3.720%)

Japan's recent auction of 40-year JGBs saw weaker demand, evidenced by a bid-to-cover ratio declining from 2.76x to 2.54x, which suggests a cooling appetite for long-duration debt. The highest accepted yield also decreased, indicating a slight easing in yield expectations, but the overall decline in demand could signal concerns about debt sustainability or market confidence. This shift may lead to broader implications for rates and risk sentiment as investors recalibrate their outlook on Japan's fiscal trajectory.