09.02.202600:57:46UTC+00Japan 10-Year Yield Jumps After LDP Win

On Monday, the yield on Japan's 10-year government bond increased by approximately 5 basis points, reaching 2.27%. This development follows the significant victory of the ruling Liberal Democratic Party (LDP), led by Prime Minister Sanae Takaichi. The LDP achieved a two-thirds supermajority in the lower house, granting Takaichi a clear mandate to implement expansionary fiscal policies. This move is anticipated to impact the yen and Japanese government bonds adversely, while potentially providing a boost to equities. According to NHK, the public broadcaster, Takaichi’s coalition secured 352 out of 465 seats in the House of Representatives, with the LDP alone winning 316 seats. The election results have heightened expectations for more relaxed fiscal policies and possible tax reductions. These potential developments have recently caused some unease in Japanese financial markets, especially concerning the nation’s growing debt. Takaichi is also expected to pursue a conservative agenda, which includes implementing stricter immigration laws and tighter regulations on land ownership.