FX.co ★ Japanese Yields Fall Ahead of Super-Long Bond Auction

Japan's 10-year government bond yield dipped below 2.1% on Thursday, easing from near 27-year highs as investors prepared for the year's first auction of super-long-term bonds. The Ministry of Finance plans to issue approximately 700 billion yen in 30-year Japanese Government Bonds (JGBs) after a series of 10-year bond sales witnessed moderately strong demand. Recent sessions have seen JGB yields rally, driven by expectations that the Bank of Japan will further increase interest rates this year, following hawkish comments from Governor Kazuo Ueda. Rising fiscal concerns, stemming from Prime Minister Sanae Takaichi's expansive spending initiatives, have also contributed to the upward pressure on JGB yields. Concurrently, Japan's real wages dropped by 2.8% in November, as inflation significantly outpaced wage growth, posing challenges to the BOJ's interest rate hike strategy.