Overview

• On July 15, the yield on newly issued 10-year Japanese government bonds climbed to 1.595%, the highest level since autumn 2008.
• Yields on new 20-year and 30-year bonds hit 2.650% and a record 3.200%, marking their strongest levels since 1999 and ever, respectively.
• In June, the Finance Ministry reduced planned ultra-long bond issuance by ¥3.2 trillion but borrowing costs continued to rise.
• Opinion polls suggest the ruling coalition may lose its Upper House majority, spurring market fears that opposition tax-cut pledges could slash up to ¥30 trillion in annual revenue.
• Finance Minister Kato pledged to uphold appropriate fiscal management to preserve market confidence in Japanese government bonds.