Japan's 30-year bond yield hits record high ahead of PM speech
Japan's 30-year government bond yield rose to a record 4.235 per cent on Monday as markets awaited Prime Minister Sanae Takaichi's remarks. Investors are watching for signs of a policy shift under US pressure to stem yen weakness, with yields expected to rise further if she maintains expansionary sp
Japan's 30-year government bond yield hit a record high on Monday, rising to 4.235 per cent, ahead of Prime Minister Sanae Takaichi's policy speech at the opening of an extraordinary parliamentary session later in the day. The yield was last up 1.5 basis points at 4.22 per cent.
Market participants are closely watching Takaichi's remarks after local media reported last week she was expected to pledge a nimble response to any unexpected developments in the economy and financial markets. Her speech is being scrutinised for signs of a potential shift in her reflationary policy stance, following US pressure to stem the yen's weakness.
"The yields across the curve stand at this level based on expectations for a shift in Takaichi's policy, but if she says anything that could suggest she would keep her expansionary policy unchanged, that could send the bond yields higher," said Masahito Sugawara, a senior strategist at Daiwa Securities.
Investors have grown increasingly concerned that Takaichi's ambitious spending plans could worsen Japan's fiscal position since she took office a year ago, adding pressure to the government bond market.
Over the weekend, US Treasury yields reversed earlier declines as investors digested a weaker-than-expected September jobs report, which tempered bets for further Federal Reserve interest rate hikes. Government bonds globally have been under pressure recently as elevated energy prices, persistent inflation concerns and expectations of higher interest rates drive yields higher.
In contrast, yields on Japan's shorter-dated bonds fell. The two-year JGB yield declined 1.5 basis points to 1.9 per cent, while the 10-year bond yield fell 2 basis points to 3.08 per cent.