FX.co ★ Japan 10-Year Yield Slips as BOJ Outlook Weighed

On Tuesday, Japan's 10-year government bond yield decreased to approximately 1.63%, reaching its lowest point in over a week. This movement occurred as investors assessed mixed indications emanating from the Bank of Japan. During the September meeting, the Summary of Opinions revealed that some policymakers were in favor of further interest rate hikes, contingent upon stable growth and inflation projections, whereas others advocated for maintaining lower rates to bolster the economy amid challenges posed by US tariffs. One member suggested a cautious approach, emphasizing the uncertainties surrounding global trade policies, US monetary policy, currency movements, and domestic wage and price dynamics. Another member indicated it might be prudent to contemplate another rate hike, considering that more than six months had elapsed since the previous adjustment. On the economic data front, Japan’s retail sales in August declined by 1.1%, falling short of the anticipated 1% increase and marking the first decrease since February 2022. Furthermore, industrial output also showed a more significant decline than expected.