Japan’s 10-year government bond yield fell to around 2.23% on Monday, reaching a one-week low as polls indicated a slight decline in approval for Prime Minister Sanae Takaichi amid the start of the lower house campaign for the snap election scheduled for early February. Takaichi called the election to consolidate power and advance expansionary fiscal policies. On the monetary policy front, the Bank of Japan left interest rates unchanged last week after raising them to a 30-year high of 0.75% in December. The central bank reiterated its readiness to hike rates further if economic and price projections are met, while also revising its inflation forecasts upward. Meanwhile, the yen strengthened to over two-month highs amid concerns of a potential joint intervention by Japan and the US to support the currency.
