Japan's 20-year government bonds have had their worst auction since 2012.

Japanese 20-year government bond auctions have seen their worst performance since 2012: the bid-to-cover ratio has dropped to 2.5 times, significantly lower than last month's 2.96 times; the tail difference has soared from 0.34 in April to 1.14, the highest level since 1987. As a result, the yield on Japanese 20-year government bonds has surged approximately 15 basis points to the highest level since 2000; the yield on 30-year government bonds has climbed to the highest level since the first issuance of bonds of that maturity in 1999; and the yield on 40-year government bonds has also risen to a record high. On the other hand, short-term Japanese bond yields have experienced a slight decline. Faced with the volatile bond market, the Bank of Japan is grappling with a difficult choice of whether to continue with its quantitative tightening policy - continuing could further push up yields, causing significant losses for bondholders; while abandoning quantitative tightening could lead to uncontrollable inflation and a collapse of the yen.