Japan’s 10-year bond yield hits highest since 2011

On Wednesday, Japan's 10-year government bond yield surged past 1.17%, marking its highest level since May 2011.

Japan’s 10-year bond yield hits highest since 2011

This increase mirrored the rise in US Treasury yields, as robust US economic data lowered expectations for further interest rate cuts by the Federal Reserve. Domestically, investors are closely watching the upcoming Bank of Japan (BOJ) branch managers' meeting this week, followed by Deputy Governor Himino's speech next week; both are expected to provide more clarity on the future outlook for interest rates in Japan. BOJ Governor Kazuo Ueda recently reiterated that any adjustments to monetary policy will be contingent on economic developments, inflation, and financial conditions. This highlights the importance of sustainable wage growth in driving inflation.

BOJ cautions on uncertainty, sparking policy speculation

The central bank also stressed the need for caution, noting the uncertainties both within Japan and globally that could impact future policy decisions. These factors fuel market speculation about the potential direction of Japan’s monetary policy in the coming months.