FX.co ★ Japan 10-Year Yield Holds Steady

Japan’s 10-year government bond yield held steady around 3.09% on Monday, hovering near a three-decade high ahead of an extraordinary Diet session and a policy speech by Prime Minister Sanae Takaichi. Japanese government bonds have come under sustained selling pressure since Takaichi’s election, as her administration’s ambitious spending initiatives and proposed tax reductions have heightened concerns about a deteriorating fiscal outlook.

Market participants also focused on a slate of economic data due this week, including August figures for wage growth, the current account balance, and household spending, as well as September readings on consumer confidence and machine tool orders.

Last week, a summary of opinions from the Bank of Japan’s September meeting showed a stronger emphasis on preventing inflation from overshooting the central bank’s 2% target. That stance signaled the possibility of another rate hike later this year, though it offered little clarity on the likely timing ahead of the BOJ’s October and December policy meetings.