FX.co ★ Japan 10Y Yield Climbs on Ueda Remarks

Japan’s 10-year government bond yield climbed above 2.21% on Friday, approaching a one-month high, after Bank of Japan Governor Kazuo Ueda warned that the weakening yen could exacerbate imported inflation as oil prices rise. This dynamic could increase pressure on the central bank to quicken the pace of policy normalization. Ueda stressed that the influence of exchange rate movements on inflation now appears greater than in the past, giving them a more prominent role in policymakers’ deliberations.

Oil prices spiked after Iran’s new supreme leader, Mojtaba Khamenei, vowed to keep the Strait of Hormuz effectively closed while Tehran intensified attacks on regional oil and transportation infrastructure. The Middle East conflict showed no signs of easing, with hardline rhetoric from leaders in both Tehran and Washington indicating that the war involving Iran remains far from de-escalation, even after nearly two weeks of fighting.