Japanese bonds continue to fall sharply, with the 40-year bond yield rising to 3.68%, the highest since its launch in 2550. The market fears that Prime Minister Sane Takaishi's economic stimulus plan will affect the fiscal position.
November 18, 2568 at 12.26:XNUMX a.m. Bloomberg News reported that Long-dated Japanese government bonds continued to decline on Tuesday (November 18, 2568). Amid investor concerns that Prime Minister Sane Takaishi's massive economic stimulus package could weaken the country's fiscal position,
The 40-year Treasury yield jumped 0.08 percentage points to 3.68%, its highest level since the issue in 2550, while the 20-year and 30-year Treasuries were up at least 0.04 percentage points, with the 30-year yield just a few basis points from its record high.
Traders are closely watching the actual spending figures for Takaishi's stimulus plan, concerned that the massive increase in bond issuance could pose a risk to the stability of Japan's financial markets. A Bloomberg poll had projected the amount to be higher than last year's 13.9 trillion yen ($8.98 billion).
Mr. Satsuki Katayama, Minister of Finance said Details are not yet available, but it is acknowledged that the package has become quite large.
Bond market volatility has heightened caution ahead of Wednesday's 20-year bond auction, which analysts expect to see weak demand. Japanese bonds are bucking the trend in other markets, with US and Australian yields falling on the same day.
Kazuya Fujiwara, Fixed Income Strategist at Mitsubishi UFJ Morgan Stanley Securities said “Bond purchases will remain limited until the details of the economic package, to be announced after the cabinet meeting on November 21, are revealed.” ready to add that Investors are still hesitant to buy long-dated bonds ahead of the 20-year bond auction.
Takaishi is scheduled to meet with Bank of Japan (BOJ) Governor Kazuo Ueda at 3:30 p.m. local time, with markets watching for a post-meeting statement that could signal the timing of the BOJ's next interest rate hike.
refer : www.bloomberg.com
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