FX.co ★ Japan 10Y Yield Tracks US Treasury Yields Higher

Japan’s 10-year government bond yield climbed to around 2.88% on Friday, snapping a two-day losing streak and mirroring a rebound in US Treasury yields. The move came amid doubts that the US government’s strategy to lower borrowing costs will deliver more than a short-lived reprieve.

Global bond yields had fallen earlier in the week after the US Treasury Department announced an expansion of its debt buyback program to help contain funding costs. Treasury Secretary Scott Bessent noted that accelerated buybacks could surpass the previously indicated $4 billion per issue and pointed to a forthcoming long-term fiscal roadmap.

At the same time, data showed that Japan’s inflation rate quickened for a second straight month, reinforcing expectations that the Bank of Japan may raise interest rates in the near term. Market participants are increasingly focused on the possibility of a move in September, after Governor Kazuo Ueda signaled that policymakers could quicken the pace of monetary policy normalization.