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Business Recorder
18 hours ago
- Business
- Business Recorder
Japan bonds fall on coalition's poll defeat as market reopens after holiday
TOKYO: Japanese government bonds fell in early trade on Tuesday, pushing up yields, as investors returning from a long holiday weekend digested the ruling coalition's recent election defeat. The yield on 10-year JGBs added 1.5 basis points (bps) to 1.535%, rising for the first time in four sessions. The benchmark 10-year JGB futures lost 0.09 yen to 138.26, threatening to end a three-session advance. Other cash bond tenors had yet to trade as of 0019 GMT. Yields move inversely to bond prices. Japan's ruling coalition lost control of the upper house in Sunday's election, a widely anticipated setback that further eroded the authority of Prime Minister Shigeru Ishiba, who lost his majority in the more powerful lower house in October. However, Ishiba has vowed to stay on, warning against creating a political vacuum as he faces an August 1 deadline for a trade deal with the United States. While the ballot does not directly decide the fate of Ishiba's administration, it heaps pressure on the embattled leader and could either imply policy paralysis or a bigger fiscal deficit, depending on the ruling party's next moves and the opposition's strength. Japan has the largest debt burden in the developed world at about 250% of its GDP. The 10-year yield pushed to the highest since October 2008 last Tuesday after opinion polls increasingly pointed to gains for opposition parties, which support debt-funded consumption tax cuts to alleviate the burden of the rising cost of living. The 30-year yield shot to an all-time high of 3.2%.
Mint
19 hours ago
- Business
- Mint
Japan bonds drift higher as traders assess fiscal fallout from ruling coalition's election defeat
Japanese government bonds drifted higher on Tuesday as investors returning from a long holiday weekend assessed the fiscal implications of the ruling coalition's recent election defeat. Benchmark 10-year JGB futures added 0.2 yen to 138.55 by 0350 GMT, after flipping between gains and losses earlier in the session. Cash 10-year JGBs edged up, sending yields down 1 basis point to 1.51%, after starting the day with small losses. Japan's ruling coalition lost control of the upper house in Sunday's election, a widely anticipated setback that further eroded the authority of Prime Minister Shigeru Ishiba, who lost his majority in the more powerful lower house in October. While the ballot does not directly decide the fate of Ishiba's administration, and the embattled leader has vowed to stay on for now, it could lead to policy paralysis or a bigger fiscal deficit, with leading opposition parties calling for debt-funded consumption tax cuts to ease the burden of rising living costs. Ishiba has rejected calls for tax cuts in favour of cash handouts, paid using tax revenues, and Finance Minister Katsunobu Kato reiterated on Tuesday the government's stance that sales tax cuts are not appropriate. Japan has the largest debt burden in the developed world at about 250% of its gross domestic product. "The election defeat shows that the consensus among voters is 'no' to cash handouts, meaning that the consumption tax cuts advocated by opposition parties are looking more likely to be realised, although the scale and duration would still need to be determined," said Daisuke Uno, chief strategist at Sumitomo Mitsui Banking Corporation. "The political situation remains fluid." The 10-year JGB yield rose to the highest since October 2008 at 1.595% last Tuesday after opinion polls increasingly pointed to opposition gains. The 30-year yield shot to an all-time peak of 3.2%, and the 20-year yield leapt to the highest since November 1999 at 2.65%. In the latest session, the 20-year yield added 1 bp to 2.535%. The 30-year and 40-year bonds had yet to trade on the day, ahead of an auction of 40-year securities on Wednesday. The two-year JGB yield declined 1 bp to 0.755%, and the five-year yield slipped 1.5 bps to 1.025%. Japanese yields were also helped lower by big drops in European and U.S. bond yields on Monday.
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Nikkei Asia
21 hours ago
- Business
- Nikkei Asia
Yen sustains gains on upper house election outcome
The ruling coalition's loss in an upper house election held over the weekend was within investor expectations. (Photo by Akira Kodaka) LISA KIM and JADA NAGUMO TOKYO -- The Japanese yen continued to trade stronger against the dollar on Tuesday morning as the ruling coalition's loss in an upper house election over the weekend was within investor expectations. The currency traded in the mid-147 level, sustaining the roughly 1% appreciation it notched the previous day, which was a holiday in Japan. The yields on the benchmark 10-year Japanese government bond (JGB) hit 1.535% at one point on Tuesday, a basis point higher from Friday's closing. Yields move inversely to prices.
Nikkei Asia
21 hours ago
- Business
- Nikkei Asia
Yen sustains gains after ruling coalition's expected election loss
The ruling coalition's loss in an upper house election held over the weekend was within investor expectations. (Photo by Akira Kodaka) LISA KIM and JADA NAGUMO TOKYO -- The Japanese yen continued to trade stronger against the dollar on Tuesday morning as the ruling coalition's loss in an upper house election over the weekend was within investor expectations. The currency traded in the mid-147 level, sustaining the roughly 1% appreciation it notched the previous day, which was a holiday in Japan. The yields on the benchmark 10-year Japanese government bond (JGB) hit 1.535% at one point on Tuesday, a basis point higher from Friday's closing. Yields move inversely to prices.
Malaysian Reserve
a day ago
- Business
- Malaysian Reserve
Ringgit rises against US dollar in early trading
THE ringgit appreciated against the US dollar in early trade, tracking US dollar softness as markets price in uncertainty ahead of the Aug 1 tariff decision by the United States (US). At 8.01 am, the ringgit rose to 4.2230/2450 against the greenback, compared to Monday's close of 4.2320/2365 Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said he expects the ringgit to maintain its positive performance today. However, he pointed out that the uncertainties over the US tariff would continue to affect market sentiments. Mohd Afzanizam said signals from the US official were rather mixed and uncertain, with US Treasury Secretary Scott Bessent indicating that the Trump administration is more concerned with the quality of trade agreements than their timing. 'The back and forth statements on the tariff plans would mean the scope for negotiation is widely open,' he told Bernama. Mohd Afzanizam said the Malaysian economy performed reasonably well in the first half of 2025, and Bank Negara Malaysia's preemptive move to cut the Overnight Policy Rate, coupled with an expansionary fiscal policy, should help support Malaysia's gross domestic product growth in the second half. He added that while the outlook remains challenging, growth prospects for Malaysia are expected to stay fairly resilient. Meanwhile, SPI Asset Management managing partner Stephen Innes said the wider spread between the ringgit and the US dollar this morning reflected two key factors, one of which is heightened scrutiny on the Tokyo cash open following the weekend election and Monday's holiday, developments that could trigger moves in the yen if Japanese Government Bond (JGB) yields respond. 'The seasonal liquidity is thin across broader foreign exchange markets, amplifying any headline-driven swings,' he added. Innes said the ringgit is holding firm amid general US dollar weakness after Bessent called for a review of the US Federal Reserve, stoking fresh concerns about the US central bank's independence. At the opening, the ringgit was mostly traded easier against a basket of major currencies. It dipped against the Japanese yen to 2.8638/8789 from 2.8612/8644, declined versus the euro to 4.9371/9628 from 4.9277/9330. However, the ringgit was slightly higher against the British pound, rising to 5.6951/7248 from 5.6954/7015 at Monday's close. The local note trended mostly higher against most ASEAN currencies. It rose vis-à-vis the Singapore dollar to 3.2969/3146 from 3.2990/3028, and appreciated against the Indonesian rupiah to 258.7/260.1 from 259.2/259.6. The ringgit fell against the Thai baht to 13.0986/1750 from 13.0754/0954, and edged up versus the Philippine peso to 7.38/7.42 from 7.40/7.41. — BERNAMA
