FX.co ★ Japan 10-Year Yield Holds Steady After Takaichi Win

Japan's 10-year government bond yield remained steady at approximately 1.66% on Monday. This level marks its highest since 2008, following a pivotal ruling party vote that positioned Sanae Takaichi, known for her fiscal dove stance and pro-stimulus approach, as the prospective next prime minister. In the Liberal Democratic Party's effort to select a successor to the hawkish Prime Minister Shigeru Ishiba, Takaichi distinguished herself as the most expansionary candidate, closely aligned with the late Shinzo Abe's "Abenomics" policies. Upon her election, Takaichi emphasized the importance of synergistic coordination between the government and the central bank to foster demand-driven inflation, backed by enhanced wages and corporate profits. Concurrently, Bank of Japan Governor Kazuo Ueda reaffirmed last Friday that interest rate increases will proceed if economic growth and inflation align with projections. He highlighted that U.S. tariffs are currently affecting the profitability of exporters, especially in the automotive sector, although the broader impact on investment, employment, and wages remains minimal.