Futures for Japan’s benchmark 10-year government bonds dropped, pointing to the prospect of higher yields.
The yen reversed losses and surged against the dollar while stock futures fell after Shigeru Ishiba was voted leader of the Japan’s ruling party, beating a rival who opposed interest rate hikes.
The currency strengthened as much as 1.3% to 142.96 on the announcement, after weakening as much as 1.2% earlier on Friday. Although the Bank of Japan (BOJ) is independent from the government, speculation of political pressure on monetary policy has seen currency traders betting on the election result.
