Japan 10-Year Yield Rises as Oil Prices Surge
Japan’s 10-year government bond yield climbed to around 2.49% on Monday as oil prices spiked following President Donald Trump’s rejection of Iran’s response to his peace proposal, leaving the Strait of Hormuz effectively shut. Iran reportedly offered to transfer part of its highly enriched uranium stockpile to a third country, while refusing to dismantle its nuclear facilities. Rising energy prices have intensified inflation concerns, particularly for oil-importing economies such as Japan. Meanwhile, minutes from the Bank of Japan’s March meeting indicated that policymakers see scope for additional interest rate hikes if an Iran-related energy shock persists and continues to push up underlying inflation. Several members stressed the importance of avoiding delayed policy action that could force sharper tightening later, noting that the central bank may need to adjust the degree of monetary accommodation in a more timely manner if price pressures prove sustained.
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