Japan 10-Year Yield Hits 3-Week High
Japan’s 10-year government bond yield climbed above 2.7% on Wednesday, reaching its highest level in three weeks as the sharp depreciation of the yen strengthened expectations of further monetary policy tightening by the Bank of Japan. The yen slid to a four-decade low amid wide interest rate differentials, persistent carry trades and broad US dollar strength. Last week, BOJ Governor Kazuo Ueda reiterated that the central bank stands ready to raise rates further if economic activity, inflation and financial conditions evolve in line with its projections. Meanwhile, Prime Minister Sane Takaichi appointed Ayano Sato to the BOJ board, with Sato saying the country’s inflation expectations remain relatively weak, signaling a more accommodative policy stance. On the economic front, business confidence among Japan’s large manufacturers rose to its highest level since 2018, underscoring the economy’s resilience despite the energy shock caused by the Middle East conflict.

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