Japanese 10‑year government bond yields rose 5.5bps to 2.93%, their highest since
1996; 30‑year yields climbed 5bps to 4.06%, nearing May record highs. The move
reflects fiscal funding uncertainty after the government has not clarified how
it will finance a two‑year cut to the food consumption tax, and reports that
Prime Minister Takaichi's administration supports near‑term Bank of Japan rate
increases, with a next hike possible in September or October. Ryutaro Kimura,
senior bond strategist at BNP Paribas Asset Management, said improving liquidity
as investors return from summer holidays has prompted markets to price faster
Bank of Japan tightening, and warned that unless Takaichi abandons expansionary
fiscal policy, yields may fall only gradually.
