A landslide win for Japan’s ruling Liberal Democratic Party (LDP) at Sunday’s election may be the best outcome for bonds and the yen, analysts say, even as Prime Minister Sanae Takaichi’s spending pledges have repeatedly rocked markets.
The vote has investors on edge because fiscal worries have sparked a stomach-churning selloff in the currency and bond markets, and a further leg lower would likely reverberate globally.
Last month’s shakeup of Japanese debt pushed up borrowing costs from the U.S. to Germany and provided a stark reminder to markets of the high debt levels and government spending coursing through major economies.
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