Japan bond yields mixed after relatively weak 5-year auction

Japanese 5-year government bond auction saw weak demand with a bid-to-cover ratio of 3.11, the lowest since February, while the 5-year yield rose 0.5 basis point to 1.910%. Discussions between Japan's Finance Minister and U.S. Treasury Secretary Bessent on currency swings sparked speculation that the Bank of Japan may accelerate rate hikes to address yen weakness. The 2-year yield rose 0.5 bp to 1.41% and the 10-year JGB yield held flat at 2.670%, signalling potential tighter global liquidity conditions that could weigh on emerging market flows including India.