Japan Bond Yields Hit Multi-Decade Highs as PM Takaichi Unveils 370 Trillion Yen Economic Blueprint

Analysis
Takaichi's blueprint locks in a fiscal-expansion trajectory markets are already pricing as inflationary, and the footnote citing BOJ independence reads as damage control rather than a substantive concession, since the text still urges the bank to align policy with government goals. A break above 3% on 10-year JGB yields before September 30 is unlikely, given the retreat to 2.73% shows the drafting walkback already relieved pressure, though the underlying driver of spending outpacing revenue plans persists; the BOJ's July 30-31 meeting is the nearer trigger, and any hawkish signal there would compound the yield risk the blueprint aimed to defuse. Confidence is moderate, resting on consistent wire reporting of the drafting revisions but no independent insight into BOJ deliberations, and the reporting rests on Reuters as the sole primary account amplified by wire pickups. Should yields still clear 3%, the BOJ would face heightened pressure to resume bond purchases and investors would demand fiscal-restraint signals before Takaichi's food-tax and further spending decisions.