FX.co ★ Japan 10-Year Yield Climbs Ahead of BOJ Meeting

Japan's 10-year government bond yield increased to over 1.6% on Thursday, recovering from the previous session's decline. This movement coincides with the beginning of the Bank of Japan's two-day policy meeting, where interest rates are anticipated to remain steady as officials assess the effects of US tariffs on Japan's export-reliant economy. Despite this expectation, analysts have posited that the Bank of Japan might implement a 25 basis point rate hike in October, spurred by signs of economic resilience. Politically, the focus turns to the ruling Liberal Democratic Party, which will elect a new leader on October 4 to replace the outgoing Prime Minister Shigeru Ishiba. Meanwhile, Japanese bond yields mirrored the upward trend in US Treasuries, following the Federal Reserve's widely expected decision to enact a quarter-point rate cut on Wednesday. The Federal Reserve's projections include two more rate reductions this year, with only one anticipated in 2026, tempering expectations for additional cuts next year.