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)