FX.co ★ Japan 10-Year Yield Hits Highest Since 1999

Japan's 10-year government bond yield surged above 2.1% on Monday, marking its highest point since February 1999, as the market reopened following an extended holiday. Bank of Japan Governor Kazuo Ueda reaffirmed the central bank's commitment to raising interest rates should economic and inflation forecasts materialize, underscoring a rising confidence that Japan is transitioning from its entrenched deflationary phase to a more sustainable, growth-oriented economy. Ueda also projected that the economy would sustain a virtuous cycle characterized by moderate yet simultaneous increases in wages and prices. The upward pressure on yields was further intensified by mounting fiscal concerns, particularly as Prime Minister Sanae Takaichi advocated for substantial government expenditure to invigorate growth. The cabinet recently sanctioned Takaichi's unprecedented 122.3 trillion yen budget, which is slated for presentation to the Diet later this month.