FX.co ★ Japan 10-Year Yield Climbs Higher on BOJ Hike Bets

Japan's 10-year government bond yield surged to approximately 1.94% on Friday, marking its highest point since 2007 amidst speculation surrounding a potential interest rate increase by the Bank of Japan later this month. Reports suggest that key figures within Prime Minister Sanae Takaichi’s administration would not object if the central bank opted to raise rates in December, although some senior officials remain cautious about the timing. The markets are anticipating a move this month, along with one or two additional rate hikes expected next year. These expectations gained momentum following comments by BOJ Governor Kazuo Ueda, who expressed confidence in Japan's economic outlook and emphasized that the central bank would carefully evaluate the pros and cons of a rate hike, taking appropriate action accordingly. Additionally, Finance Minister Satsuki Katayama indicated her expectation that the central bank would conduct its policy judiciously to achieve the 2% inflation target, utilizing its own specific methods.