Japan’s 10-year government bond yield held steady around 2.25% on Friday as the Bank of Japan kept its policy rate unchanged in line with expectations, after raising it to a 30-year high of 0.75% last month. The central bank reiterated that it remains prepared to raise rates if economic and price projections materialize, while also revising its inflation forecasts upward. Earlier in the week, the benchmark yield surged to 27-year highs as Prime Minister Sanae Takaichi prepared to dissolve parliament and call a snap election to consolidate power and pursue increased spending. Takaichi is also expected to propose cutting the 8% sales tax on food, fueling fiscal concerns amid uncertainty over how the government would offset lost revenue. Yields have since retreated after Finance Minister Satsuki Katayama urged market participants to remain calm.
