Yields on Japanese government bonds (JGBs) have resumed their upward trend, with the 10-year benchmark yield climbing above 2.8%. This increase reflects growing investor concerns about Prime Minister Sanae Takaichi's pro-growth fiscal agenda and its potential impact on Japan's fiscal outlook. Additionally, there is apprehension regarding the Bank of Japan's (BOJ) capacity to further raise interest rates.

Prime Minister Takaichi's expansionary policies are seen as a key factor pushing up the 10-year debt yield, intensifying worries about the BOJ's future monetary moves.

Sources