Japan bond and currency selloff could extend further, says ex-policymaker

Former BOJ policymaker Adachi highlights concerns over Japan's fiscal policies leading to a potential selloff in the yen and Japanese government bonds. He notes that despite narrowing Japan-US interest rate differentials, the yen's decline indicates growing investor demand for a higher risk premium associated with Japan's fiscal situation. Adachi emphasizes that bond yields have surged since the current Prime Minister Takaichi took office, raising concerns that the BOJ may need to reconsider its bond tapering plans. He warns that rising bond yields could pose significant risks to Japan's economy next year, making the situation crucial for traders to monitor closely.