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.



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