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Japan's super-long bonds fall after global selloff on fiscal worries
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Japan's super-long bonds fall after global selloff on fiscal worries
Sep 2, 2025 10:09 PM

TOKYO, Sept 3 (Reuters) - Japan's super-long bonds fell

on Wednesday, with the 30-year yield hitting an all-time high,

as a selloff in global bonds rippled through the region on

mounting concerns over global fiscal health.

The 30-year JGB yield jumped as much as 8

basis points (bps) to a record high of 3.28%. The 20-year JGB

yield rose 7 bps to 2.69%, its highest level

since October 1999. Bond yields move inversely to prices.

Long-dated bonds were sold off around the world overnight,

sending the U.S. 30-year Treasury yields to their highest levels

since mid-July, while yields on European and UK bonds also rose

to multi-year highs.

In Japan, market worries about the expansion of government

spending resurfaced as Prime Minister Shigeru Ishiba's close

aide announced intention to resign from his post.

"The overnight selloff of U.S. and European bonds hurt

investor sentiment in Tokyo, and coincidentally, there was a cue

from domestic politics, which also drove a selloff of JGBs,"

said Katsutoshi Inadome, senior strategist at Sumitomo Mitsui

Trust Asset Management.

Japan's ruling Liberal Democratic Party's (LDP) secretary

general, Hiroshi Moriyama, said on Tuesday he intended to resign

from his post. This raised bets that Ishiba, who has resisted

calls to quit over an election loss, may follow suit.

"The possibility that Ishiba will step down from his post is

high, and there will be pressure from both inside and outside of

the LDP to expand government spending," said Takashi Fujiwara,

chief fund manager at Resona Asset Management's fixed income

investment division.

"It is unlikely, but we have to take a risk of Sanae

Takaichi taking over Ishiba's position. She will pursue a

low-interest rate policy while boosting spending."

Takaichi, who faced off with Ishiba in a runoff vote in the

LDP presidential election last year, had said the central bank

should maintain ultra-low rates to support economic recovery.

An auction of 30-year bonds due on Thursday also weighed on

investor sentiment, said Fujiwara.

(Reporting by Junko Fujita; Editing by Rashmi Aich and

Subhranshu Sahu)

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