Japan bonds slide before 10-year auction amid fiscal worries at home and abroad
EWJ•Japanese government bonds fell ahead of a 10-year auction, with the 30-year yield reaching a record 4.24% and the 10-year yield rising to 3.115%. Investors weighed Prime Minister Sanae Takaichi’s fiscal policies and a French debt selloff.
1. Yields rise before auction
Japanese government bonds fell on Tuesday ahead of a finance ministry auction of about 2.6 trillion yen ($16.5 billion) in 10-year notes. The 30-year yield rose 1 basis point to a record 4.24%, while the 10-year yield added 3 basis points to 3.115%.
2. Fiscal concerns weigh
Investor sentiment was weak amid worries about Prime Minister Sanae Takaichi’s expansionary fiscal policies and contagion from a French debt selloff. Takaichi pledged on Monday to “control” bond issuance and act swiftly against market turbulence.
3. Other maturities climb
The two-year yield rose 2 basis points to 1.925%, the five-year yield gained 3 basis points to 2.39%, and the 20-year yield increased 1 basis point to 2.98%, a three-decade high. Mizuho analyst Yuhi Kawano said prospective buyers may be “somewhat wary” of Takaichi continuing to be seen as fiscally aggressive.
