FX.co ★ Japan 10-Year Yield Hits Highest Level Since 2008

Japan's 10-year government bond yield surged past 1.59% on Tuesday, marking its highest point since 2008. This increase is fueled by heightened expectations for increased fiscal spending ahead of the Upper House election set for July 20. Markets are factoring in the likelihood of new stimulus measures, potentially including a reduction in the consumption tax, as policymakers aim to bolster economic growth. This rise in yields occurred even though the Ministry of Finance has cut back on issuing super-long bonds, indicating a significant upward pressure on shorter-term rates. Investors are now keenly awaiting forthcoming trade and inflation data, which could provide insight into the effects of U.S. tariff threats on Japan's economy. Simultaneously, global markets are turning their attention to the U.S. consumer price report, which may shape the Federal Reserve's upcoming policy decisions.