Demand has risen at every note and bond auction in Japan this year, helping the nation maintain the world's second-lowest borrowing costs on a debt burden poised to exceed ¥1 quadrillion.
Last week's sale of 10-year notes attracted bids for 3.72 times the ¥2 trillion offered, the highest so-called bid-to-cover ratio since April. It was the sixth-straight sale of debt this year where demand increased, boding well for Thursday's auction of 40-year bonds, the longest maturity. The benchmark 10-year yield slid to 0.94 percent on Feb. 3, within 0.5 basis point of the 14-month low reached in January.
The government said last month it may miss a target to balance its budget by 2020 and it's struggling to garner political support for tax increases. That hasn't sparked a jump in yields as investor demand for haven assets outweighed concern Japan will fail to repay its debt, forecast to climb 10 percent next year.