06.10.202602:29:35UTC+00Japan Yield Gains as Takaichi Vows Fiscal Expansion

Japan’s 10-year government bond yield rose to around 3.12% on Tuesday, hovering near its highest level in three decades, as Prime Minister Sanae Takaichi pressed ahead with fiscal expansion despite mounting concerns about yen weakness and the government’s financing requirements. Addressing parliament, Takaichi vowed to reduce the consumption tax on food, while reassuring markets that the initiative would be funded without issuing new government bonds.

Investors are also bracing for a raft of economic data due this week, including August figures on wages, the current account, and household spending, along with September readings on consumer confidence and machine tool orders. Meanwhile, minutes from the Bank of Japan’s September policy meeting indicated that policymakers are placing greater weight on curbing inflation that is running above the central bank’s 2% target. The discussion sustained expectations for another interest rate increase later this year, though officials offered little clarity on the likely timing.