Japan 10Y Bond Yield Hits Near 29-year High

Japan 10 Year Government Bond Yield increased to 2.54%, the highest since July 1997. Over the past 4 weeks, Japan 10Y Bond Yield gained 6.94 basis points, and in the last 12 months, it increased 115.40 basis points.

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.

Japan’s 10-year government bond yield climbed to around 2.48% on Friday, reversing the prior session’s decline as renewed US-Iran clashes in the Strait of Hormuz lifted geopolitical risk and revived inflation concerns. Three US Navy destroyers transiting the strategic waterway reportedly intercepted Iranian attacks and conducted retaliatory strikes, although President Donald Trump said the ceasefire remains in effect. In Japan, data showed real wages rose for a third consecutive month in March, reinforcing expectations that the Bank of Japan could continue tightening policy even as the Middle East conflict adds uncertainty to the growth outlook. Meanwhile, minutes from the BOJ’s March meeting suggested policymakers see room for additional rate hikes if an Iran-related energy shock persists and sustains broader inflationary pressures.