World shares are mixed after a closely watched auction of 40-year Japanese government bonds fell flat as worries mount over growing levels of debt.
In early European trading, Germany’s DAX gained 0.2% to 24,283.71, while the CAC 40 in Paris was up 0.3% at 7,847.20. Britain’s FTSE 100 rose 0.2% to 8,794.80.
The future for the S&P 500 slipped 0.1% while that for the Dow Jones Industrial Average was down 0.2%.
In Asian trading, Japan’s Nikkei 225 index was nearly unchanged at 37,722.40.
Government debt and bonds have become an increasingly important issue for markets in wealthy countries in recent weeks as yields have climbed around the world.
Wednesday’s auction of about 500 billion yen (about $3.5 billion) drew a bid-to-cover ratio of just 2.21, the lowest level since July 2024. The ratio of the amount of bonds offered versus the amount of bids received is seen as a measure of demand. When demand is slack, bond prices fall and yields rise.
After years of pumping money into the economy through hefty bond purchases, Japan’s central bank has been gradually cutting back, undermining demand at a time when other institutional investors also have been buying fewer JGBs.
A recent auction of 20-year JGBs also found relatively few buyers. But analysts said worries eased a bit after Japan’s Finance Ministry recently sent a questionnaire to bond investors that they took as a signal of efforts to calm the market by suggesting it might issue less debt.
When yields softened earlier in the week in Japan, the bond market rallied, Thomas Matthews of Capital Economics said in a report. The “somewhat soft 40-year JGB auction seems to have contributed to a slight souring of the global mood,” he said.
The dollar fell to 144.16 Japanese yen from 144.36 yen. The euro rose to $1.1322 from $1.1329.
Elsewhere in the region, Hong Kong’s Hang Seng index lost 0.5% to 23,258.31, while the Shanghai Composite index ended flat at 3,393.93.
Australia’s S&P/ASX 200 edged 0.1% higher to 8,396.90. The S&P/NZX 50 in New Zealand fell 1.8% after the central bank cut its benchmark interest rate by 0.25 percentage points, as expected, to 3.25%.
In South Korea, the Kospi jumped 1.3% to 2,670.15, helped by a global rally in technology shares. Samsung Electronics’ shares climbed 3.7% while SK Hynix was up 2.7%.
In Taiwan, the Taiex added 0.1%. India’s Sensex slipped 0.1%.
Oil prices rose after the U.S. authorization to Chevron to export crude from Venezuela expired Tuesday. The Trump Administration has been trying to wind down U.S. reliance on Venezuelan energy.
