Latest news with #JGBs
Mint
13 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.
Business Recorder
7 days ago
- Business
- Business Recorder
Japan's super-long bonds rise after heavy selloff
TOKYO: Japan's super-long government bonds rose on Wednesday, as investors bought back the bonds after a heavy selloff this week. The 40-year JGB yield fell 8 basis points to 3.4%. The 30-year JGB yield fell 2.5 bps to 3.135%. Yields move inversely to prices. The 30-year bond yield hit a record high in the previous session amid concerns about the nation's fiscal health ahead of a closely-monitored upper house election at the end of this week. The market weighed the risk of the defeat of the Liberal Democratic Party and its coalition partner Komeito, as a potential defeat could empower opposition parties, which are seeking to cut or abolish the sales tax. 'The market has priced in the defeat of the LDP coalition and the expansion of Japan's spending,' said Takashi Fujiwara, chief fund manager at Resona Asset Management's fixed income investment division. 'So from now until the end of the week, investors may start buying the bonds to cover short positions. The 30-year bond yield may not rise further from the current level of about 3.1%,' he said. Japanese government bonds fall as 30-year auction tests demand The 20-year JGBs have not been traded yet, after the yield rose to its highest since November 1999 on Tuesday. The 10-year JGB yield rose to as high as 1.595%, and was last flat at 1.585%. The two-year JGB yield was flat at 0.785% and the five-year yield rose 1.5 bps to 1.095%.
Nikkei Asia
7 days ago
- Business
- Nikkei Asia
Japan bond yields jump on fiscal fears ahead of upper house vote
Bonds Opposition parties calling for tax cuts gain traction with voters Bond investors are pricing in fiscal deterioration in Japan as the upper house election approaches. (Photo by Yutaka Miyaguchi) LISA KIM TOKYO -- Japanese government bond yields jumped this week, as investors fret over the country's fiscal health and a looming upper house election that threatens to shift power away from the ruling coalition. Yields on benchmark 10-year Japanese government bonds (JGBs) rose to 1.595% on Tuesday, their highest level in about 17 years. 20-year JGB yields rose to 2.650%, their highest in some 25 years. 30-year JGB yields hit 3.200%, an all-time high since the government started issuing these ultra-long bonds in 1999. Bond yields move inversely to prices.
Business Recorder
14-07-2025
- Business
- Business Recorder
JGB yields surge toward May highs on election-led fiscal concerns
TOKYO: Yields on Japanese government bonds (JGBs) surged on Monday, toward historic levels last seen in May, as concerns grew that an upcoming election could pave the way for increased fiscal spending. Prices for long-dated debt continued their decline from last week, driving yields sharply higher, as prospects dimmed that Prime Minister Shigeru Ishiba's ruling coalition will retain its majority in the upper house after a vote on July 20. A potential defeat could empower opposition parties that have pledged in their campaign platforms to cut or abolish the sales tax. Mounting fiscal concerns and soft demand at debt auctions triggered a surge in super-long yields to record levels in late May. In response, the Ministry of Finance curtailed its issuance super-long JGBs, starting with sales this month. 'Broadening of the ruling coalition would quite likely increase the probability of a reduction in the consumption tax rate,' Yusuke Matsuo, senior market economist for Mizuho Securities, wrote in a note to clients. Japanese government bonds fall as 30-year auction tests demand That in turn would put 'upward pressure on super-long interest rates in a climate where global fiscal risk has already been very much on the minds of bond market participants.' The 10-year JGB yield rose 7 basis points (bps) to 1.57%, its highest since May 22. The 20-year yield rose 7 bps to 2.57%, closing in on the 2.6% level seen on May 23 that was the highest since October 2000. The 30-year yield was up 7.5 basis points to 3.115%, nearing the all-time high of 3.185% hit on May 21.
Wall Street Journal
14-07-2025
- Business
- Wall Street Journal
JGBs Fall on Japan's Fiscal Worries Ahead of Upcoming Election
0010 GMT — JGBs fall in price terms in the morning Tokyo session on Japan's fiscal worries ahead of the Upper House election on July 20. Regardless of the election's results, JPMorgan sees two key takeaways emerging. First, uncertainty about the consumption tax cut debate will probably continue, two members of JPMorgan's Japan Fixed Income Strategy say in a note. Second, the risk balance is tilted toward larger fiscal spending, the members say. 'The true significance lies in the perception of unrestrained fiscal discipline,' the members add. The 10-year JGB yield rises 3bps to 1.530%. (
