At the auction of 30-year US Treasuries, domestic demand was below the six-month average, but overseas demand was strong.

On Jan. 12, the winning interest rate for the auction of 30-year treasury bonds was 3.585%, up from 3.513% last month, with a turnover of $18 billion. The bid ratio is 2.451, up from 2.249 last month and the highest level since September 2021.

It is worth noting thatThe final issue rate fell by 2.4bps, the largest margin on record, indicating strong demand.The auction of US debt is authorized first and then issued, so there is a difference between the actual offering rate and the auction rate.

Among the blowout demand, overseas demand has attracted extraordinary attention: indirect bidders such as central banks, private investors or sovereign wealth institutions accounted for 74.63 per cent, up from 61.57 per cent last month and a six-month average of 69.4 per cent, also a record high.

Accordingly, the proportion of direct bidders fell, winning only 16.03 per cent, below the recent average of 19.0 per cent, while dealers accounted for only 9.04 per cent, the lowest since records began.

The US Treasury revealed earlier this week that $40 billion worth of three-year notes and $32 billion worth of 10-year notes auctioned this month also attracted above-average demand.

There is an analysis thatThis demand may come from Japan.There are fears that the Bank of Japan may continue to raise yields on 10-year Treasuries when it announces its latest policy decision next week.

Last month, the BoJ unexpectedly raised the target ceiling yield on government bonds to 0.50 per cent from 0.25 per cent, causing market volatility. If yields rise, prices will fall. As a result, investors in Japanese bonds are likely to look closer to the US, which is closer to the end of the rate hike.

Wall Street news mentioned earlier that although non-American investors represented by Japan have been selling US Treasuries throughout the year, Bank of America Corporation believes thatThe recent selling pressure on US debt actually comes from within the United States.:

Time zone analysis shows that the rise in US bond interest rates in November mainly occurred during the New York trading session, which means that buying may be dominated by domestic accounts.

Selling by foreign investors and banks appears to be slowing, according to weekly data from the Federal Reserve and Japan's Ministry of Finance.

This is evidenced by the sharp contrast between weak domestic demand and strong overseas demand in this Treasury auction.

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