Japanese Bonds Decline as PM Takaichi Eyes Political Gamble, Yen Weakens

• Japanese government bonds declined due to investor worries over fiscal policy amid political threats.
• Yield on 30-year bonds rose by 12 basis points to 3.52%; 10-year bond futures dropped by 71 ticks.
• Rumors suggest PM Sanae Takaichi might dissolve parliament and hold elections, potentially reinforcing expansionary fiscal policy.
• A stronger mandate for Takaichi could pressure government bonds and the currency.
• Yen weakened to 157.90 per dollar, with officials cautioning against speculative trading and markets anticipating government intervention.

Why It Matters: Japanese bonds fall and yen weakens amid political uncertainty and potential fiscal expansion.