Japan 10-Year Yield Jumps After LDP Win
Japan’s 10-year government bond yield rose about 5 basis points to 2.27% on Monday following the ruling Liberal Democratic Party’s historic victory. Led by Prime Minister Sanae Takaichi, the LDP secured a two-thirds supermajority in the lower house, giving her a clear mandate to pursue expansionary fiscal policies. This will likely to weigh on the yen and Japanese government bonds while potentially boosting equities. Takaichi’s coalition won 352 of the 465 seats in the House of Representatives, according to public broadcaster NHK, with the LDP alone capturing 316 seats. The outcome reinforced expectations for looser fiscal policy and potential tax cuts, developments that had unsettled Japanese financial markets in recent weeks amid concerns over the country’s rising debt. Takaichi is also expected to advance a conservative agenda, including tougher immigration rules and tighter land ownership regulations.
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