Japan's 30-year bond yields hit record high ahead of PM's remarks

Japan's 30-year government bond yield rose to a record high on Monday, as market players awaited remarks from Prime Minister Sanae Takaichi at the opening of an extraordinary parliamentary session later in the day.

Here are a few details:

The 30-year JGB yield hit a record high of 4.235% and was last up 1.5 basis points (bps) at 4.22%.

Market participants are closely watching Takaichi's policy speech after local media reported last week she was expected to pledge a nimble response to any unexpected developments in the economy and financial markets.


Her remarks are being scrutinised for signs of a potential shift in her reflationary policy stance, following US pressure to stem the yen's weakness.

"The yields across the curve stand at this level based on expectations for a shift in Takaichi's policy, but if she says anything that could suggest she would keep her expansionary policy unchanged, that could send the bond yields higher," said Masahito Sugawara, a senior strategist at Daiwa Securities.

Investors have grown increasingly concerned that Takaichi's ambitious spending plans could worsen Japan's fiscal position since she took the office a year ago, adding pressure to the government bond market.

Over the weekend, US Treasury yields reversed earlier declines as investors digested a weaker-than-expected September jobs report, which tempered bets for further Federal Reserve interest rate hikes.

Government bonds across the globe have been under pressure recently as elevated energy prices, persistent inflation concerns and expectations of higher interest rates drive yields higher.

Yields on Japan's shorter-dated bonds fell, with the two-year JGB yield declining 1.5 bps to 1.9%.

The 10-year bond yield fell 2 bps to 3.08%.