FX.co ★ Japan 10-Year Yield Steady Ahead of PM Vote

Japan's 10-year government bond yield remained steady at approximately 1.66% on Tuesday following a steep rise in the previous trading session. This stability comes as investors anticipate the parliamentary vote poised to confirm Sanae Takaichi as the nation's next prime minister. The ruling Liberal Democratic Party has formed a coalition with the Japan Innovation Party, with both entities likely to pursue policies of fiscal expansion and spending reforms. However, questions linger regarding the coalition's stability and whether Takaichi might implement more stringent policies. The alliance with the Japan Innovation Party (Ishin) could enhance a more balanced approach to economic and monetary policy. Meanwhile, Bank of Japan board member Hajime Takata noted on Monday that the current environment is suitable for an interest rate hike, which contributed to the earlier increase in yields. Investors are now focusing on the upcoming Bank of Japan meeting next week, where policymakers are expected to keep interest rates steady.