As fiscal worries intensify, Japan's ultra-long-term government bond yields rise.

As Japanese Prime Minister Sanae Takaichi's spending plan intensified market concerns about fiscal expansion, the country's ultra-long-term government bond yields rose. The 30-year government bond yield climbed 10 basis points to 3.93%, and the 20-year government bond yield surged nearly 9 basis points to 3.64%. The yen fell to its lowest level in 40 years against the US dollar. Takaichi's government announced a roadmap to achieve over 370 trillion yen in public and private investment in strategic areas such as artificial intelligence and semiconductors by fiscal year 2040, exacerbating fears about Japan's massive debt-to-GDP ratio issue. The prime minister's inclination towards monetary easing is also seen as a potential obstacle to the Bank of Japan raising interest rates. Ryutaro Kimura, senior bond strategist at Paris Asset Management, said: "Investors are increasingly focusing on the fiscal policy of the Takaichi government and political pressure on the Bank of Japan, weakening expectations for a rate hike in the short term."