Japan 10-Year Yield Hovers Near 18-Year High
Japan’s 10-year government bond yield traded around 1.96%, close to its highest level since 2007, after Bank of Japan Governor Kazuo Ueda signaled that the central bank is nearing its inflation target, hinting at a potential near-term rate hike. Markets are pricing in a possible BOJ rate increase next week, with attention on Ueda’s post-meeting remarks for guidance on policy next year. Key members of Prime Minister Sanae Takaichi’s government reportedly would not oppose a rate hike this month, though some senior officials remain cautious on timing. At the same time, a downward revision to Japan’s Q3 GDP, showing a sharper contraction, added complexity to the rates outlook. Rising fiscal concerns from Takaichi’s expansive spending plans also weighed on market sentiment.
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