Japan 10Y Bond Yield Hits 4-week Low

Japan’s 10-year government bond yield slipped to around 2.57% on Monday, marking a one-month low after the US and Iran reached a peace agreement that would restore access through the Strait of Hormuz. The announcement drove oil prices down to a two-month low, easing inflation concerns and lowering cost pressures for major energy-importing economies such as Japan. Markets are also positioning ahead of the Bank of Japan policy decision, where officials are widely expected to raise interest rates to curb inflation and support the yen. Tthe yen remained under pressure as traders increased short positions amid persistent carry trade activity, where investors borrow in yen to fund higher-yielding assets abroad. These moves reflect the still-wide interest rate differential with the US and continue to overshadow the BOJ’s gradual tightening cycle and repeated currency intervention efforts from Tokyo.

Japan 10 Year Government Bond Yield decreased to 2.56%, the lowest since May 2026. Over the past 4 weeks, Japan 10Y Bond Yield lost 17.99 basis points, and in the last 12 months, it increased 111.25 basis points.

Japan's 10-year government bond yield slipped to around 2.65% on Friday, hitting a one-week low as investors looked ahead to the Bank of Japan's policy meeting next week, where it is are widely expected to raise interest rates amid persistent inflation and a weak yen. The central bank is expected to lift its policy rate by 25 basis points to 1%, marking the first increase since December last year and the highest level since 1995. Meanwhile, BOJ Governor Kazuo Ueda has been hospitalized with a hepatic cyst infection and will miss the meeting. Japanese bond yields also followed US Treasury yields lower after President Donald Trump said a peace agreement with Iran could be signed as soon as this weekend in Europe. His comments sent oil prices sharply lower, easing market concerns about stubborn inflation and the need for furtherinterest rate hikes.