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

On Thursday, Japan's 10-year government bond yield rose above 1.52%, marking its fourth consecutive daily increase. This rise adds to the growing pressure on the Bank of Japan to reconsider its dependence on an inflation measure linked to domestic demand and wages, which has thus far prevented significant tightening. Governor Kazuo Ueda has taken a cautious stance, emphasizing that "underlying inflation" is still below the Bank's 2% target. Nevertheless, there is a push from some board members to shift focus to headline inflation, which climbed to 3.3% in June, as a part of a more assertive communication strategy. Despite this, policymakers remain divided on the timing and scale of future interest rate hikes, given the uncertainty surrounding economic forecasts and possible impacts of tariffs.