Japan’s 10-year government bond yield hovered around 3% on Wednesday, consolidating its recent decline after reports indicated the Bank of Japan is hesitant to deliver a rare back-to-back interest rate hike this month, though it is keeping the option of a possible increase in December on the table. The central bank is said to see little justification for consecutive rate hikes unless there are clear signs of a sharp rise in upside inflation risks.
At the same time, BOJ Governor Kazuo Ueda stated that policymakers will continue to closely monitor bond yields, and reiterated that long-term interest rates are ultimately set by market forces. His remarks underscored a cautious stance as the central bank continues to step away from rigid yield-curve control.
In global markets, oil prices extended their gains amid intensifying hostilities between Saudi Arabia and Iran-backed Houthi rebels, amplifying fears of potential supply disruptions in the Middle East and sustaining elevated inflationary pressures.
