Buyers flee Japanese debt as Takaichi hits the ground spending

Key Highlights

• But she launched her campaign - echoing opponents - ‌with a vow to suspend a food levy for two years, and bond markets baulked at the vagaries of how any election winner could pay for the estimated 5 trillion yen ($32 billion) hit to annual revenue.
• There were no buyers, dealers ‌said, so 20-year, 30-year and 40-year yields rocketed to record highs in a rout reminiscent of the 2022 collapse in British gilts and a warning for market confidence in Japan's balance sheet.
• PARTIES IN RACE TO PLEDGE MORE SPENDING "Markets (are) digesting the idea that all parties in Japan are in a race to see who can promise to spend more money," said Ales Koutny, head of international rates at Vanguard in London.
• "As we saw with the UK, markets at some point just have enough and start to demand much higher financing costs." And those costs are surging on the implications for an economy that had grown ⁠accustomed to cheap money.
• Ten-year yields have leapt 18.5 basis points in ‌two days, the sharpest rise since Japan loosened a cap on the benchmark bond yield in 2022.