Japan’s 10-year government bond yield eased to around 2.23% on Thursday, remaining range-bound for two weeks now as investors positioned ahead of lower house elections this weekend. Prime Minister Sanae Takaichi’s ruling LDP is expected to gain seats as she seeks voter support for increased spending and other policy initiatives. Japanese bonds and the yen have faced pressure since Takaichi took office, with her push for expansionary fiscal policies raising concerns over debt-funded spending and the country’s fiscal outlook. Investors are also watching Japan’s Q4 GDP report due next week, expected to rebound after the prior quarter’s sharp contraction. Meanwhile, this week’s 10-year bond auction showed softer demand amid election jitters, with an average yield of 2.249%, up sharply from 2.095% at the previous sale.
