July 12 (Bloomberg) -- Japan’s 10-year yields were near the highest level in two weeks after the party of Prime Minister Naoto Kan lost control of the parliament’s upper house, undermining his efforts to cut the nation’s dependency on debt.

Benchmark bonds maintained last week’s losses as the election made it less likely Kan’s Democratic Party of Japan will be able to raise the sales tax to bolster the nation’s finances. The Bank of Japan will hold a two-day policy meeting this wee...