FX.co ★ Japan 10-Year Yield Rises for 7th Straight Session

Japan's 10-year government bond yield surpassed 1.58% on Tuesday, marking its seventh consecutive day of increase as traders anticipate further interest rate hikes by the Bank of Japan (BOJ). According to recent data released on Friday, Japan's economy grew more robustly than expected in the second quarter. This expansion was primarily fueled by net exports despite the challenges posed by US tariffs, strengthening the argument for a more aggressive monetary policy stance. Concurrently, the BOJ is under pressure to abandon an inflation measure linked to domestic demand and wage growth, which has limited its ability to tighten policy. Nevertheless, Governor Kazuo Ueda has maintained a cautious approach, emphasizing that "underlying inflation" remains below the central bank's 2% target. In contrast, Japanese officials dismissed comments from US Treasury Secretary Scott Bessent, who criticized the BOJ for being "behind the curve," seemingly pushing for a faster pace of policy normalization.