Japan’s 10-year government bond yield eased slightly below 2.35% on Wednesday after Finance Minister Satsuki Katayama urged calm among market participants following a selloff that pushed yields to multi-decade highs. The spike came after Prime Minister Sanae Takaichi’s proposal to cut the 8% sales tax on food raised concerns about Japan’s fiscal outlook as it remains unclear how the government will make up for the lost revenue. Markets also worried that a deeper bond market rout could prompt the Bank of Japan to intervene using its unlimited bond-buying program. Meanwhile, investors are bracing for a snap election on Feb. 8, as Takaichi seeks to consolidate power and advance her expansionary fiscal agenda. Elsewhere, the BOJ is widely expected to leave its policy rate unchanged at 0.75% later this week after a 25-basis-point hike in December.