FX.co ★ Japan 10-Year Yield Resumes Decline

Japan’s 10-year government bond yield slipped to around 2.75% on Tuesday, extending Friday’s decline. The move followed comments by Finance Minister Satsuki Katayama, who said the country’s massive public pension fund would adjust its portfolio if needed and proposed adding government bonds to a tax-advantaged investment scheme for individual investors.

Her remarks came after media reports indicated that Tokyo has no immediate plans to change the asset allocation of its state pension funds, tempering expectations of near-term policy support for domestic financial markets.

Japanese government bonds have been under sustained selling pressure this year, driven by mounting worries over the country’s fiscal expansion plans and persistent inflationary forces. In this context, the government recently released a draft roadmap that calls for more than ¥370 trillion in combined public and private investment by fiscal 2040, targeting 17 strategic sectors designated as priorities by the Takaichi administration.