[Weak Demand for Japan's 10-Year Government Bond Auction as Election Nears and Rate Hike Expectations Pressure Bond Market] Reported by Jinse Finance, demand for Japan's 10-year government bond auction held on Tuesday fell below the 12-month average, as investors grew increasingly cautious ahead of the upcoming House of Representatives election. The bid-to-cover ratio for this auction was 3.02, lower than the previous auction's 3.30 and the 12-month average of 3.24. The tail spread was 0.05, unchanged from last month. Traders are preparing for market volatility ahead of the February 8 election. Recent polls indicate that Japan's ruling coalition is expected to win 300 out of 465 seats, with the Liberal Democratic Party likely to secure a single-party majority. This outcome would allow Prime Minister Sanae Takaichi to advance fiscal stimulus plans, which could increase the government's debt burden. Last month, triggered by Takaichi's plan to cut consumption tax, Japanese government bond yields surged to multi-year highs. Although they have since retreated, the benchmark 10-year government bond yield remains near 2.25%, the highest level since 1999. Overnight index swaps show that traders estimate a 76% chance of a rate hike by April, with a 25-basis-point hike by June fully priced in by the market. (Jin10)