Analysis:Japan has few answers as bond rout puts fiscal plans at risk

Tokyo, August 19 - Japan faces an uncertain future as a bond market sell-off threatens to jeopardize Prime Minister Sanae Takaichi's fiscal plans. Analysts claim the government's available options to stabilize markets, such as sporadic cuts to bond issuance or emergency central bank buying, are merely short-term fixes rather than long-term solutions.

The country has not experienced such persistent price pressures since the previous oil shock, according to Mari Iwashita, an executive rates strategist at Nomura Securities. The challenge of maintaining inflation at the Bank of Japan's 2 percent target is growing more difficult. The global bond selloff has centered on Japan, with the 10-year yield nearing 3 percent for the first time since the mid-1990s as investors grow uneasy about the nation's mounting debt and inflation risks stemming from the Middle East conflict.