Core Viewpoint - Volatility in Japan's longer-dated government bonds is increasing following Sanae Takaichi's election win, which is expected to impact global markets, including the US and UK [1][2]. Group 1: Market Reactions - Yields on Japan's 40-year debt increased by as much as 17 basis points, driven by expectations that Takaichi's pro-stimulus policies may lead to more government bond sales [3]. - Yields on UK and US 30-year bonds rose by up to six basis points, reaching 5.56% and 4.77% respectively, as a result of the pressure from Japanese bond movements [3]. - Goldman Sachs anticipates that for every 10 basis point increase in Japanese government bonds (JGB), there will be a corresponding rise of two to three basis points in US, German, and UK yields [2]. Group 2: Strategic Insights - Goldman Sachs noted that Japan has been a net exporter of bearish shocks to global long-end rates this year, predicting higher long-end JGB yields and a steeper yield curve following Takaichi's election [4]. - The recent volatility in Japanese government bonds has been a precursor to movements in global counterparts, with concerns over fiscal deficits amplifying the situation [5]. - The sustainability of the long-end selloff will depend on the evolution of the political landscape in Japan [7]. Group 3: Government Actions - Japan's finance ministry has proposed to reduce the issuance of super-long term government bonds in upcoming auctions as a measure to support long-dated bonds [6]. - Investors had been cautious about fiscal spending prior to Takaichi's victory, with opposition parties advocating for tax cuts, indicating a complex political environment affecting bond markets [8].