JAKARTA - Indonesia raised 18.9 trillion rupiah ($1.31 billion) from Tuesday's biweekly bond auction, just over half of the indicative target, as incoming bids fell to the weakest since April 2020, the finance ministry said.

Total bids during the auction were 40.09 trillion rupiah.

Bids during the past few sovereign debt auctions have been weak after U.S. treasury yields rose, which have pressured the rupiah and pushed Indonesian bond yields up.

The weighted average yields of the bonds sold on Tuesday were higher than comparable bonds sold in the previous auction on March 2. 

However, the finance ministry said Tuesday's low bids were as expected and there was foreign interest in the assets.

"There are factors that led investors to wait and see, which include a decision that will be taken by the U.S. central bank during the FOMC meeting ... regarding the volatility of UST yields," it said in a statement, referring to the Federal Open Market Committee meeting due later this week.

Handy Yunianto, a fixed income analyst with brokerage Mandiri Sekuritas, said demand during auctions will only rise if foreign bids increase.

"What foreign (investors) are waiting for is a certainty regarding the UST outlook," he told Reuters by text.

Yields of U.S. Treasury rose sharply late last week, lifted by optimism over the U.S. economy and increased debt supply expectations with the enactment of a $1.9 trillion pandemic-related federal fiscal stimulus plan, leading to some outflows from emerging markets.

Indonesia will hold a greenshoe auction on Wednesday, offering investors the same series of bonds with the pricing of Tuesday's auction, aiming to raise a maximum 11.1 trillion rupiah, the ministry said.

Indonesia's central bank is due to conclude a two-day policy meeting on Thursday. Analysts in a Reuters poll expected Bank Indonesia to leave interest rates unchanged. ($1 = 14,400.0000 rupiah)

(Reporting by Gayatri Suroyo and Fransiska Nangoy; Editing by Andrew Heavens, Martin Petty) ((gayatri.suroyo@thomsonreuters.com; +622129927609; Reuters Messaging: gayatri.suroyo.thomsonreuters.com@reuters.net))