Japan’s 20-year bond yields may drop to levels unseen since the collapse of Lehman Brothers Holdings Inc. in September 2008 as the Federal Reserve keeps interest rates near zero, Royal Bank of Scotland Group Plc. said.
Japanese longer-term bonds headed for their worst day in one year after the central bank cut allocations for buying the debt. Ten-year notes gained after U.S. Treasuries climbed following the Federal Reserve meeting.
Japan is considering an 8 trillion yen ($82 billion) target for budget-deficit cuts over the next two years as officials debate how to proceed with a sales-tax increase that threatens to damage an economic rebound.