Japanese Long-Term Bonds Decline Amid Economic Stimulus Concerns

According to Odaily, Japanese long-term government bonds experienced a significant decline on Monday as concerns over fiscal conditions intensified ahead of the anticipated announcement of Japan's first economic stimulus package this week. This decline in Japanese bonds mirrored the downturn in U.S. and UK bond markets over the weekend. The yield on Japan's 20-year government bonds rose to its highest level since 1999, while the 30-year yield increased by 5 basis points to 3.26%, and the 40-year yield climbed by 5.5 basis points to 3.6%. Traders are closely monitoring the actual fiscal spending outlined in Prime Minister Sanae Takaichi's economic plan, as there are concerns that higher debt issuance could threaten market stability in Japan. The GDP data released on Monday supported Takaichi's push for a large-scale stimulus plan, despite the Bank of Japan's expectation of interest rate hikes in the coming months. Daiwa Securities noted that "concerns over a large-scale stimulus package are keeping investors cautious, and the impact on bond issuance remains unclear, putting selling pressure on long-term bonds."