Japan government bonds (JGBs) slipped in early Tokyo trading as traders grew wary of inflation risks and loose fiscal policy. Citi Research’s Tomohisa Fujiki highlighted rising energy costs and government spending as key concerns, noting that the central bank’s yield cap may struggle to contain market pressures. The 10-year JGB auction today—offering 2.6 trillion yen ($18 billion)—is expected to have a 2.3% coupon, but demand is likely muted as yields hover near historic highs. Five-year JGB yields rose 1.5 basis points to 1.745%, signaling renewed stress over near-term inflation.