Goldman Sachs (GS) Sees Japan Bond ‘Shocks’ Spilling Over to Treasuries

Volatility in Japan’s longer-dated government bonds is on the rise following Sanae Takaichi’s election win, and the moves may spill over to markets as far away as the US and UK, according to Goldman Sachs Group Inc.

The ascent of Takaichi risks pushing up long-end Japanese yields, strategists including Bill Zu wrote in a note. For every 10 basis point “idiosyncratic JGB shock,” investors can expect around two to three basis points of upward pressure on US, German and UK yields, the strategists wrote.