FX.co ★ Japan 10-Year Yield Climbs for Second Session

Japan’s 10-year government bond yield rose above 2.8% on Monday, extending its gains for a second straight session as higher oil prices intensified inflation worries. The move came amid persistent uncertainty over efforts to reopen the Strait of Hormuz. Iran said its talks with Oman were nearing an agreement, but denied holding direct negotiations with the United States, contradicting Washington’s assertions that a deal was close.

On the domestic front, data showed Japan’s current account surplus narrowed in June. Robust exports of AI-related electronics were more than offset by increased imports, driven in large part by higher crude oil purchases. At the same time, the Bank of Japan, in its summary of opinions from the July meeting, flagged rising risks of faster inflation. One policy board member indicated that the pace of interest rate hikes could accelerate.