BREAKING: Japan’s 40-year government bond auction recorded its weakest demand in 14 years on Wednesday. The bid-to-cover ratio, a measure of demand, dropped to 2.127 from 2.214 at the previous auction. As a result, the 40-year bond yielded 3.375%, the highest on record. This comes as investors are increasingly concerned about rising government spending. Headlines about Prime Minister Ishiba’s possible resignation and the US-Japan trade deal have also shaken market confidence. Meanwhile, Japan’s 10-year yield hit 1.6%, the highest since the 2008 Financial Crisis. Japan’s bond market is cracking.(The Kobeissi Letter)