FX.co ★ Japan 10-Year Yield Climbs on Hawkish BOJ Signals

Japan’s 10-year government bond yield exceeded 1.44% on Monday, marking its third consecutive rise. This increase is driven by speculation of a more aggressive stance on monetary policy from the Bank of Japan. Governor Kazuo Ueda recently suggested that additional rate hikes could be on the horizon if wage growth effectively boosts domestic consumption and enables companies to raise their prices, which are essential to maintaining inflation at the 2% target. Additionally, the central bank reaffirmed its intention to gradually reduce its bond purchases, aiming to allow long-term yields to reflect market conditions more accurately. In contrast, recent data revealed that Japan’s industrial production in May did not meet expectations, hampered by persistent high US tariffs. The 25% tariff on Japanese car imports remains a significant issue in the ongoing trade talks with Washington. Looking forward, investors are eagerly awaiting Tuesday’s Tankan survey for deeper insights into corporate sentiment and the overall economic landscape.