Japan's 30-year government bond yield rose to a record high on Monday, as market players awaited remarks from Prime Minister Sanae Takaichi at the opening of an extraordinary parliamentary session later in the day.
Here are a few details:
- The 30-year JGB yield hit a record high of 4.235 percent and was last up 1.5 basis points at 4.22 percent.
- Market participants are closely watching Takaichi's policy speech 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 remarks are 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 the 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 across the globe have been under pressure recently as elevated energy prices, persistent inflation concerns and expectations of higher interest rates drive yields higher.
- Yields on Japan's shorter-dated bonds fell, with the two-year JGB yield declining 1.5 bps to 1.9 percent.
- The 10-year bond yield fell 2 bps to 3.08 percent.
Reuters
