FX.co ★ Japan 10-Year Yield Rises Ahead of BOJ Decision

Japan’s 10-year government bond yield climbed to around 2.6% on Tuesday, rebounding from a one-month low as investors focused on the Bank of Japan’s upcoming policy decision. The central bank is widely expected to lift its benchmark interest rate by 25 basis points to 1% in an effort to rein in inflation and bolster the yen. The currency, however, remains under pressure amid persistent carry trade activity and a still-wide interest rate differential with the United States, which has overshadowed the BOJ’s gradual tightening and repeated currency intervention by Tokyo. Market participants were also tracking geopolitical developments, with expectations that the US and Iran will sign a peace agreement in Switzerland on Friday — a step that could pave the way for reopening the Strait of Hormuz.