Japan 10-Year Yield Holds Near 30-Year High

Japan’s 10-year government bond yield remained just below 3% on Thursday, staying near its highest level since September 1996 as investors awaited the upcoming Bank of Japan policy decision. The BOJ is widely expected to raise borrowing costs on Friday as policymakers contend with persistent inflationary pressures, with another rate increase anticipated by the end of January. US Treasury Secretary Scott Bessent has also repeatedly called on the BOJ to pursue more aggressive tightening to limit excessive yen weakness. Meanwhile, markets continued to assess Japan’s fiscal outlook amid Takaichi’s plans for substantial government spending and tax cuts. Elsewhere, the US Federal Reserve raised interest rates for the first time in three years and signaled further tightening this year to curb inflation.

Japan’s 10-year government bond yield climbed above 3%, reaching its highest level since September 1996 as the global bond selloff deepened amid surging energy prices, mounting inflation risks and growing fiscal concerns. The Bank of Japan is also widely expected to raise its policy rate to 1.25% on Friday, its highest level since April 1995, as the central bank faces persistent upside risks to prices. Markets will be closely watching for BOJ guidance on the potential for another rate hike later this year. US Treasury Secretary Scott Bessent has also repeatedly urged the BOJ to tighten policy more aggressively to curb excessive yen weakness. Meanwhile, data showed that Japanese exports rose more than anticipated in August, supported by strong demand for AI-related chips despite ongoing supply disruptions stemming from the conflict in the Middle East.

Japan 10 Year Government Bond Yield increased to 3.02%, the highest since September 1996. Over the past 4 weeks, Japan 10Y Bond Yield gained 9.74 basis points, and in the last 12 months, it increased 141.88 basis points.