FX.co ★ Japan 10-Year Yield Hits Fresh 17-Year High

Japan's 10-year government bond yield surged above 1.77% on Wednesday, reaching a new 17-year peak prior to a significant debt auction that could provide insight into investor interest amidst escalating fiscal concerns. The Ministry of Finance is set to auction approximately 800 billion yen in 20-year Japanese Government Bonds (JGBs). On Tuesday, the government unveiled a supplementary budget exceeding 25 trillion yen to support Prime Minister Sanae Takaichi’s stimulus agenda, significantly higher than last year’s additional 13.9 trillion yen budget, intensifying anxieties over national debt. Concurrently, Bank of Japan Governor Kazuo Ueda informed the prime minister that the central bank is incrementally increasing interest rates to guide inflation towards its 2% target while maintaining sustainable economic growth. Following the meeting, Ueda reported to the media that no specific requests regarding monetary policy were made by the prime minister. On the economic data front, machinery orders in Japan rose more than anticipated in September, indicating solid capital investment.