Trump’s Japan Trip Fuels Bond Market Worries on Defense Spending

Traders in the Japanese government bond market are on high alert Tuesday for any sign that President Donald Trump will increase pressure on his ally to make a bigger boost to military spending, as he meets with Japan’s new leader.

Any such hints would reignite upward pressure on long-maturity JGB yields, just as calm had begun to return to the market. Prime Minister Sanae Takaichi’s surprise victory in the Liberal Democratic Party election earlier this month had sent rates to multi-year highs.