Japan 10Y Yield Jumps on Inflation Concerns
Japan’s 10-year government bond yield rose above 2.3% on Monday, marching toward multi-decade highs reached earlier this year as the ongoing Middle East conflict and surging oil prices heightened global inflation risks. Tensions show no signs of easing, with President Donald Trump issuing a 48-hour ultimatum to Iran to reopen the Strait of Hormuz or face strikes on its power plants, while Tehran warned it would target key US and Israeli assets in the region if its energy facilities were hit. Last week, the Bank of Japan kept its policy rate unchanged but signaled a bias toward tighter monetary policy to counter inflationary pressures from rising oil prices. Board member Hajime Takata dissented, recommending a 25 basis point hike to 1% for a second consecutive meeting. BOJ Governor Kazuo Ueda also noted that a rate increase remains possible if the economic slowdown from the Iran conflict proves temporary.
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