Japan's supplementary budget and bond yield surge fuel market uncertainty under PM Takaichi

Summary

Japanese Prime Minister Sanae Takaichi is compiling a ~3 trillion yen ($19 billion) supplementary budget to help households with cost-of-living pressures, but this has sparked market nervousness as Japanese bond yields hit 40-year highs. The budget marks a reversal from Takaichi's earlier stance that extra spending was unnecessary, and skepticism remains about whether she can maintain her promises on debt issuance. Japan continues to struggle with higher energy prices, rising subsidy costs, and a weak yen, adding to market uncertainty.