Strong US long-term bond auctions on the 7th and US ultra-long-term bond auctions on the 8th have had an impact, and Japanese government bonds are also seeing increased buying, Kyodo reports citing sources

The transmission here is a familiar one: strong demand at US long and ultra-long auctions compresses term premium at the back of the Treasury curve, and JGBs, particularly the super-long sector, tend to trade sympathetically given the overlap in the buyer base and the cross-market duration bid. Episodes of this kind have historically mattered most for the JGB long end precisely because that is where supply anxiety and fiscal premium have been concentrated; when super-long paper has been the weak point domestically, an offshore tailwind has tended to show up first in the 20- to 40-year sector rather than the belly. The distinction worth drawing is between genuine domestic sponsorship, typically life insurers and pensions buying on yield levels, and a purely correlated spillover from the US bid, since the former has tended to persist and the latter to fade once the US auction cycle passes. The actors with prior form here are the Ministry of Finance, which has previously adjusted super-long issuance when demand faltered, and domestic accounts whose hedged and unhedged pickup over Treasuries drives allocation. Follow-ons to note are the next domestic auction results in the super-long zone, any supply signalling from the MoF, and whether the buying holds once the US auction calendar clears, which in past episodes has been the tell for whether the move was imported or homegrown.