Japan will sell benchmark 10-year bonds on Thursday, just two days before the ruling party elects a new leader in a key vote that will determine fiscal and economic policy.
The market is nervous going into the auction with the 10-year yield hovering near the highest since 2008 as speculation mounts that the central bank will raise interest rates in October. A sale of two-year notes on Tuesday exposed growing concerns among investors, and the US government shutdown has heightened worries about a global fallout.