The strained bond market in Japan, the stocks are preparing for the reaction of Prime Minister Ishiba to exit

Written by Junco Fujita and Rai Wei

TOKOUS (Reuters) -The stressful government bond market was appointed in Japan and the high stocks for more fluctuations on Monday after the resignation of the Prime Minister of Financial Falcons, Chigro Eshiba.

The revenue on the Japanese government bonds (JGBS) was already hovering near record levels due to global concerns about the financial deficit and local political pressure on Ishiba. The Nikkei’s participation scale in Japan recently slipped from a record level last month.

Attention is now focusing on the potential caliphs of Aishiba and a potential return to the policies of “Abynomex” in the late Shinzo Abe, the leader of Japan for a long time and who headed the huge financial stimulation and unprecedented cash dilution from the central bank.

“The knee reaction to the markets will be two branches of JGBS, the weakest yen and the high -rise stock prices because it sees the highest risks of a reflection policy similar to Apinums,” said Naka Matsua, the Supreme Chief Strategy in Tokyo Stock in Tokyo.

The relatively conservative financial position of Ishiba was considered a positive for the JGB market, as the returns are still relatively low worldwide, but concerns about the massive debt pile in Japan and expanding the financial deficit remain.

The prominent debts of the country are approximately 250 % of its gross domestic product, which is the highest in the developed world. The Ministry of Finance said last week that Japan’s budget requests for the next fiscal year amounted to a record for the third year in a row.

“It is possible that the return on the long bonds of the resignation of Ishiba will rise,” said Katsotoshi, a prominent in Sumitomo Mitsoy Trust. “There was upward pressure on the long -term bond returns due to uncertainty about financial conditions, and pressure will increase.”

JGB’s 30 -year -old return last week to 3.285 % unprecedented, while the 20 -year -old return was 2.69 %, which is the highest since 1999. The increase in revenue expresses the high borrowing costs of the government, companies and the public.

The JGB market was treated in mid -July when the Ishiba alliance suffered a great defeat in the House of Representatives elections. The external parties that were carried on tax cuts, increased spending on seats, and speculation for weeks on pressure within the Liberal Democratic Eyesiba (LDP) party to resign.

Everything has reached his head on Sunday, when Ishiba said he should take responsibility for election losses and the education of the Democratic Democratic Party by voting on the emergency leadership.