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Japan bonds track Treasuries lower with fiscal worries as backdrop
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Japan bonds track Treasuries lower with fiscal worries as backdrop
Nov 13, 2025 10:50 PM

TOKYO, Nov 14 (Reuters) - Japanese government bonds fell

on Friday, pushing yields higher, as they tracked declines in

U.S. Treasuries overnight amid growing doubts about an imminent

Federal Reserve rate cut.

Longer-term Japanese yields rose more, steepening the yield

curve - a trend that has been in place all month as investors

fretted over the potential for less fiscal restraint under new

Prime Minister Sanae Takaichi.

The 30-year JGB yield advanced 2 basis points

(bps) to 3.21%, while the 20-year yield gained

1.5 bps to 2.71%.

The 10-year yield rose 1 bp to 1.7% and the

five-year yield added 0.5 bp to 1.245%. The

two-year yield was flat at 0.925%.

Takaichi said this week she would work on setting a new

fiscal target extending through several years to allow more

flexible spending, essentially watering down Japan's commitment

to fiscal consolidation.

She has also asked the Bank of Japan to go slow in raising

rates to align with her focus on fostering economic growth.

"In the super-long sector, Takaichi's fiscal policy measures

are already priced in term premia, to some extent, but

expectations for issuance cuts provide support in the near term

and the final scope of fiscal stimulus may open up further room

for a rise in yields," Barclays analysts wrote in a research

note.

Meanwhile, the 10-year Treasury yield edged up

slightly to 4.1173% on Friday after climbing 4.4 bps in the

previous session.

A growing number of Fed policymakers in recent days have

signaled hesitation on further easing, helping push financial

market-based odds of a reduction in borrowing costs in December

to near even.

Minutes of the Federal Open Market Committee's last meeting

are due for release on Wednesday of next week.

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