Japan’s Ministry of Finance recorded a 5.84 bid-to-cover ratio at its 20-year bond sale on Oct. 20, a demand signal for government debt as Japan’s inflation report and central bank meeting approach.
Competitive bids totaled ¥3,139.0 billion, while the ministry accepted ¥537.1 billion. At the Sept. 15 sale, it received ¥2,131.3 billion and accepted ¥532.1 billion, for a 4.01 ratio.
The National Interbank Funding Center, acting with People’s Bank of China authorization, set China’s Oct. 20 one-year loan prime rate at 3.0% and the rate for terms longer than five years at 3.5%.
Reuters later reported the yen up 0.2% at ¥158.15 per U.S. dollar and the euro up 0.2% at $1.1234. In a separate earlier dispatch before the auction, Reuters described the dollar at ¥158.56, unchanged, and the euro at $1.1216, steady. The figures are separate snapshots from different points in the session.
Separately, France’s National Assembly scheduled a vote on the revenue section of its 2027 budget for Oct. 20. The section covers taxes, revenue estimates and the broad budget balance, and must pass before lawmakers examine spending. A vote on the full bill is scheduled for Nov. 17.
ING global head of markets Chris Turner and ING FX strategist Francesco Pesole wrote on Oct. 12 that concerns over French government debt and the political effort to address deficits were weighing on markets. They compared the debt concerns with Italy’s 2018 episode. Pepperstone analyst Chris Weston has argued that higher French bond yields can increase the government’s refinancing costs as older debt is rolled over.
Japan’s September inflation figures are due Oct. 23, ahead of the Bank of Japan’s Oct. 29-30 meeting, dates also covered in earlier dollar-yen coverage.
