FX.co ★ Japan 10-Year Yield Rises After Upward GDP Revision

On Monday, Japan's 10-year government bond yield rose to over 1.47%, recovering from recent three-week lows. This came in the wake of revised economic data indicating that the economy was flat in the first quarter, an improvement from the initially reported 0.2% contraction. Despite the positive revision, this performance highlights a significant deceleration from the 0.6% growth recorded in the final quarter of 2024. Contributing to the complex economic landscape, Japan's current account surplus diminished in April, failing to meet market expectations. In the previous week, Japanese bond yields were pressured due to stronger-than-anticipated demand during 10- and 30-year bond auctions, which helped bolster prices. Nonetheless, the current rise in yields is also supported by evolving policy expectations. Bank of Japan Governor Kazuo Ueda recently indicated the central bank's intention to further reduce its Japanese government bond purchases in the upcoming fiscal year, affirming a gradual yet consistent move towards the normalization of monetary policy.