Interest Rates: Government bond futures rebound, long-term interest rate at 1.075%, limited impact from weak 10-year bond auction.

Government bond futures rebounded at 15:15, with a weak 10-year bond auction limiting the impact on long-term interest rates at 1.075%.
The central contract month for government bond futures in December closed higher at 142.87, up 5 sen from the previous trading day. The yield on new 10-year government bonds (long-term interest rates) remained unchanged at 1.075%. In the absence of significant clues, buying dominated government bond futures trading. While the results of the 10-year bond auction were considered weak, their impact on the market was limited.
Government bond futures saw buying dominating in the morning. Following the upward trend in futures during overnight trading, trading began. Subsequently, pressure for adjustment before the 10-year bond auction led to rising interest rates in the long-term zone. This trend also affected government bond futures, pushing them into negative territory.
The results of the 10-year bond auction were considered weak. This was against the backdrop of expectations of additional interest rate hikes by the Bank of Japan and the observation that there was no particular undervaluation in the 10-year zone, with limited investor participation according to a domestic securities bond sales representative. However, the market perceived the results as within expectations, resulting in a muted market response.
Subsequently, government bond futures gradually rose into positive territory. There were no specific buying cues. It was noted that the futures had been slow to decline, prompting buying back activities.