Volatility in Japan’s longer-dated government bonds is on the rise following Sanae Takaichi’s election win, and the moves may spill over to markets as far away as the United States and the United Kingdom, according to Goldman Sachs Group.

The ascent of Takaichi as the ruling Liberal Democratic Party (LDP)'s president risks pushing up long-end Japanese yields, strategists including Bill Zu wrote in a note. For every 10 basis point "idiosyncratic JGB (Japanese government bond) shock,” investors can expect around two to three basis points of upward pressure on U.S., German and U.K. yields, the strategists wrote.

Moves in JGBs have foreshadowed that of their global counterparts this year, with a spike in superlong yields in the Asian nation amplifying ructions fueled by fears of widening fiscal deficits. Goldman’s warning sharpens the focus on longer-dated notes, which have come under scrutiny as governments ramp up borrowings and inflation proves stickier than expected.