Japan’s 10-year government bond yield rose 2 basis points to 1.65% on Wednesday as investors positioned for the Bank of Japan’s policy decision this week, where rates are expected to remain unchanged. Still, policymakers are set to discuss conditions for resuming rate hikes as tariff-related risks ease, though persistent inflation continues to complicate the outlook. On Tuesday, US Treasury Secretary Scott Bessent met with Finance Minister Satsuki Katayama to discuss foreign exchange volatility, urging “sound monetary policy” in what was viewed as a critique of Japan’s gradual pace of tightening. Meanwhile, Economic Revitalization Minister Minoru Kiuchi said the government’s focus is on accelerating growth, underscoring Prime Minister Sanae Takaichi’s commitment to expansionary fiscal policy. Elsewhere, US President Donald Trump met with Takaichi on Tuesday, pledging stronger US-Japan ties and signing agreements on trade and critical minerals.
