FX.co ★ Japan 10-Year Yield Rises Ahead of BOJ Meeting

Japan’s 10-year government bond yield advanced to approximately 1.6% on Tuesday as investors returned from a long holiday break, with attention now focused on the forthcoming decision from the Bank of Japan (BOJ) later this week. It is broadly anticipated that the BOJ will maintain its interest rates at 0.5%, as policymakers evaluate the consequences of US tariffs on Japan's export-reliant economy. Market participants are also keenly awaiting new domestic economic indicators, with expectations that both exports and imports will continue to be subdued and that core Consumer Price Index (CPI) will decelerate to 2.7%, marking the lowest level since November 2024. On the international front, the market is gearing up for a likely interest rate reduction by the US Federal Reserve on Wednesday, spurred by recent indications of a cooling labor market and moderate inflation in the United States.