FX.co ★ Japan 10-Year Yield Holds Near 17-Year High

Japan's 10-year government bond yield remained above 1.66% on Friday, hovering near its peak since 2008, following Bank of Japan Governor Kazuo Ueda's reiteration that interest rates will increase if economic and pricing conditions align with projections. Governor Ueda highlighted that U.S. tariffs are putting pressure on exporters' profits, especially in the automobile sector, although the wider effects on investment, employment, and wages have so far been minimal. Meanwhile, recent data revealed that Japan's unemployment rate rose to 2.6% in August, marking a 13-month high and exceeding projections of 2.4%. Politically, investor attention has shifted towards a critical ruling party leadership election this weekend. This election will determine the next prime minister and influence future fiscal and monetary policies. The Liberal Democratic Party is set to choose a successor to former Prime Minister Shigeru Ishiba, who stepped down last month, amid ongoing discussions weighing household relief against fiscal conservatism.