FX.co ★ Japan 10-Year Yield Climbs on Firm Wage Data

The yield on Japan’s 10-year government bond increased to 1.68% on Thursday, approaching levels not seen in 17 years, as stable wage growth fueled expectations that the Bank of Japan will continue its tightening monetary policy. In September, nominal wages saw a 1.9% rise, up from the 1.5% increase in August, driven by steady base pay and slight growth in overtime compensation. Nevertheless, wage increases still fell short of the 3.4% surge in consumer prices, resulting in a 1.4% drop in real wages, marking the ninth consecutive month of decline. Bank of Japan Governor Kazuo Ueda emphasized that the wage outlook for 2026 will be pivotal in deciding when to resume tightening, following the central bank's decision to leave policy unchanged last week. Additionally, the latest auction for 10-year Japanese Government Bonds drew bids amounting to 2.97 times the available issuance, indicating the lowest level of demand since May.