Japan’s 10-year government bond yield slipped to around 3.08% on Tuesday, retreating from 30-year highs after the latest 40-year bond auction drew its strongest demand since 2020 amid elevated yields. The bid-to-cover ratio rose to 3.1, up from 2.82 at the previous auction and above the 12-month average of 2.67. Japan’s 40-year yield traded above 4.2%. Despite the pullback, domestic yields stayed near multi-decade highs as persistent concerns over energy-driven inflation fueled expectations that the Bank of Japan could quicken its pace of monetary tightening. Oil prices extended their gains after Iranian officials reportedly questioned the prospects of reaching an agreement before the US midterm elections in November, following President Donald Trump’s rejection of Tehran’s latest proposal. Meanwhile, a former BOJ official said the central bank could raise its benchmark rate for a second straight month at its October meeting, citing elevated inflation risks.