Japan’s 10-year government bond yield climbed above 1.71% on Monday, reaching its highest level since 2008 amid stronger-than-expected growth data. Japans economy contracted 0.4% quarter on quarter in the three months to September, reversing a 0.6% expansion in Q2 but beating market forecasts for a 0.6% decline. The rise came despite Prime Minister Sanae Takaichi urging the Bank of Japan to maintain low interest rates. BOJ Governor Kazuo Ueda, however, pointed to resilient consumption supported by higher household incomes and a strengthening labor market, noting that underlying inflation is gradually approaching the BOJs 2% target and leaving the door open for an imminent rate hike. Meanwhile, growing fiscal concerns in Japan, fueled by expectations of aggressive stimulus measures, added further upward pressure on JGB yields.
