Japan bond yields surge as fiscal fears mount ahead of election
Japan Bank in Tokyo on 30 May 2024.
Kazuhiro Nogi | AFP | Getty Images
Japan’s comparison has increased to its highest level since 2008, as concerns about financial expenditure assembly in front of a higher home selection, a 10 -year state bond return.
LSEG’s data increased to 1.599%, the highest since 2008, the 10 -year instrument yields. While 30 -year JGB yields rose to 3.21%record, Japan’s 20 -year state bond returns have increased to its highest levels since 1999.
“Japan’s long returns and super long returns are now increasing due to the expectations of financial expansion after the upper home selection next week,” Japan Macro Strategist Ken Matsumoto, Japan Macro Strategist at Credit Agricole CIB. He said.
He actively discusses consumption tax deductions before the upper Assembly elections, which will take place on Sunday.
People are concerned about the election because politicians talk about consumption tax deductions and any kind of tax reductions in Japan commit suicide.
Amir Anvarzadeh
Japan Equity Market Strategist in Asymmetric Consultants
Japanese Prime Minister Shigeru Ishiba claimed that he would not resort to tax cuts financed by more debt issuance opposition parties Calls tax cuts and more spending that can lead to more debt.
Mizuho Securities Vishnu Varathan, President of Asia former Japanese Macro Research, said that this political uncertainty would be doubtful about whether the Japan government would depend on the financial discipline of the Japanese government.
Japan has one of the highest levels of public debt in the world, depending on the size of its economy. While the government marks the need for more financial discipline He relys on a new lending to finance his obligations. Only tax revenues are insufficient to cover the costs of the government.
“They are concerned about the election. Politicians are talking about consumption tax deductions, and any kind of tax cuts in Japan are suicide.” He said.
Japan 10 -year government bond returns
“So we need more efficiency to invest in the bond market. [going on] In the JGB market, CN CNBC said.
In addition to the upcoming elections, the Japanese Bank has underlying factors that can bring the next ratio hike. Although it is still high, Tokyo’s inflation reached 3.1% annually in June and slower than 3.6% in May.
“This may allow Boj to review the inflation forecast upwards and can accelerate the timeline for the next ratio increase,” Union Bancaire Privée Asian Economist Carlos Casanova said. He said.
Furthermore, the supply-demand imbalances in the Japanese bond markets may become more pronounced, especially because life insurers have additional supplying capacity, Mal State Street Street Investment Management Masahiko Loo.
In June, Japan Bank said that as of April next year, government bond purchasing discounts will slow down the speed and will keep the comparison interest rate constant as economic risks increase. Boj reiterated its plans to reduce monthly Japanese government bond purchases in the direction of last year’s guidance, about 3 trillion yen ($ 2.76 billion) until March 2026.
