Japan’s super-long bond yields soar to records on market fears

The longest-dated Japanese government bond yields soared to all-time highs yesterday, as investors’ worries about demand for the debts flared following a poor auction of 20-year securities.

- KEVIN BUCKLAND

Super-long JGB yields have been rising for weeks against a backdrop of elevated US Treasury yields and worries about fiscal stimulus ahead of a crucial upper house election slated for July, in a headache for the Bank of Japan that may soon be compelled to act.

The central bank has steadily been reducing support for the market by paring its monthly bond purchases, unwinding decades of aggressive monetary stimulus.

Several parties have been calling for consumption tax cuts, which Prime Minister Shigeru Ishiba has so far resisted.

On Monday, he told parliament that Japan’s fiscal situation was worse than Greece's at the height of the European debt crisis, according to local media reports.