Japan 10-Year Yield Hits Over 26-Year High

2025-12-19 04:13 By Jam Kaimo Samonte 1 min. read

Japan’s 10-year government bond yield surged toward 2.1% on Monday, hitting its highest level since February 1999 after the BOJ raised its benchmark interest rate to the highest level since 1995.

The central bank hiked rates by 25 bps to 0.75% as it gradually moves away from ultra-loose monetary policy, while inflation has remained above target for an extended period.

The BOJ also projected that companies are likely to continue delivering steady wage increases in 2026 amid improving corporate profits.

Moreover, the surge in Japan’s 10-year government bond yield was partly driven by expectations that the yen’s recent sharp drop may pressure the BOJ into raising interest rates sooner than previously anticipated.

Meanwhile, BOJ Governor Kazuo Ueda refrained from signaling a clear path for further rate hikes, emphasizing flexibility to respond to future developments.

Ueda also said long-term rates should be determined by markets, indicating no immediate concerns about surging bond yields.



News Stream
Japan 10-Year Yield Eases as Policy Outlook Mulled
Japan’s 10-year government bond yield fell about 5 basis points to 2.24% on Tuesday, retreating from three-week highs as investors reassessed the country’s policy outlook following Prime Minister Sanae Takaichi’s landslide election victory. Markets are factoring in Takaichi’s pledge that her stimulus measures will not further strain public finances, while her supermajority is seen as providing greater policy clarity and reducing the risk of adverse fiscal scenarios. Her ruling coalition secured a two-thirds majority in the lower house, giving her a strong mandate to pursue higher spending and tax cuts. On Monday, she reiterated her commitment to suspend the 8% sales tax on food for two years. Japanese markets will be closed on Wednesday for a holiday.
2026-02-10
Japan 10-Year Yield Jumps After LDP Win
Japan’s 10-year government bond yield rose about 5 basis points to 2.27% on Monday following the ruling Liberal Democratic Party’s historic victory. Led by Prime Minister Sanae Takaichi, the LDP secured a two-thirds supermajority in the lower house, giving her a clear mandate to pursue expansionary fiscal policies. This will likely to weigh on the yen and Japanese government bonds while potentially boosting equities. Takaichi’s coalition won 352 of the 465 seats in the House of Representatives, according to public broadcaster NHK, with the LDP alone capturing 316 seats. The outcome reinforced expectations for looser fiscal policy and potential tax cuts, developments that had unsettled Japanese financial markets in recent weeks amid concerns over the country’s rising debt. Takaichi is also expected to advance a conservative agenda, including tougher immigration rules and tighter land ownership regulations.
2026-02-09
Japan 10-Year Yield Falls as Election Looms
Japan’s 10-year government bond yield dropped to around 2.22% on Friday, hitting a three-week low as investors prepared for this weekend’s lower house elections. Prime Minister Sanae Takaichi called the snap vote to secure backing for increased spending and potential tax cuts, with her ruling coalition widely expected to win decisively. Concerns over how the government would fund its ambitious spending plans and offset potential revenue losses weighed on markets, amid uncertainty over Japan’s fiscal outlook. Investors are also awaiting the Q4 GDP report next week, expected to rebound following a sharp contraction in the previous quarter. Meanwhile, this week’s 10-year bond auction showed softer demand amid election jitters, with an average yield of 2.249%, up from 2.095% at the prior sale.
2026-02-06