Japan 10-Year Yield at 2-Week High

Japan’s 10-year government bond yield climbed to around 2.81% on Friday, rising for a fourth consecutive session and reaching a two-week high as expectations for further Bank of Japan rate hikes increased. The move came as Japan’s annual consumer inflation accelerated to a six-month high of 1.7% in June, reinforcing expectations for further BOJ tightening later this year, though the central bank is widely expected to hold rates steady at next week’s meeting. At the same time, Brent crude climbed above $100 per barrel amid escalating Middle East tensions, raising fears of further supply disruptions and higher import costs. Separately, concerns over Japan’s fiscal outlook also weighed on government bonds, with rising debt-service costs becoming a growing focus as long-term borrowing costs continued to rise. Rising US Treasury yields, with the 10-year yield climbing above 4.7%, also added upward pressure on Japanese bond yields as investors reassessed the global interest rate outlook.

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