FX.co ★ Japan 10YYield Rises Amid Ceasefire Uncertainty

Japan’s 10-year government bond yield rose to around 2.4% on Thursday, retracing the previous session’s decline as uncertainty surrounding the US-Iran ceasefire kept investors wary of inflation risks. A senior Iranian official warned that elements of the ceasefire proposal had already been violated following new Israeli strikes on Lebanon, while Tehran continued to largely restrict traffic through the Strait of Hormuz. On Wednesday, Japanese yields had fallen in response to the initial ceasefire announcement, underscoring Japan’s vulnerability to disruptions in Middle Eastern oil supplies. Meanwhile, a former Bank of Japan official indicated that the central bank is likely to raise its policy rate this month to avoid falling behind in its inflation-fighting efforts. Markets are now closely watching for guidance from BOJ Governor Kazuo Ueda ahead of the April 28 policy decision, much as they did in December before the bank’s most recent rate hike.