FX.co ★ Japan 10-Year Yield Steady After BOJ Decision

Japan’s 10-year government bond yield remained stable at approximately 2.25% on Friday, following the Bank of Japan's decision to maintain its policy rate, aligning with market expectations. This comes after the central bank increased the rate to a 30-year peak of 0.75% last month. The Bank of Japan emphasized that it stands ready to raise rates if economic and inflation forecasts are realized, while it also adjusted its inflation predictions upward. Earlier in the week, the benchmark yield escalated to a 27-year high as Prime Minister Sanae Takaichi prepared to dissolve parliament and call for a snap election to strengthen her position and advocate for increased government spending. Additionally, Takaichi is anticipated to suggest reducing the current 8% sales tax on food, stoking fiscal concerns due to the uncertainty of how the government would compensate for the resultant loss in revenue. Yields have since eased after Finance Minister Satsuki Katayama called for calm among market participants.