Investing.com - In a striking turn of events, Japan witnessed its standard 10-year government bond yield ascend to a level not seen since late April - an apparent result of growing conjecture regarding the Bank of Japan's (BOJ) prospective hawkish adjustment this month.
The upward trajectory was further fueled by a similar climb in U.S. Treasury yields, as robust employment figures bolstered expectations for additional Federal Reserve tightening measures. The 10-year JGB yield saw an increase by 2.5 basis points (bps), bringing it to a solid 0.46%, inching closer to the BOJ’s established ceiling under their Yield Curve Control (YCC).
Simultaneously, futures for these crucial bonds dipped by .4 yen and hit lows unseen in over two months at one point during trading.
Japan’s wage growth has been accelerating at its fastest rate in close to thirty years according to recent data, piling on more pressure for the central bank to reconsider its stance during this month-end meeting – potentially paving the way for greater flexibility with regard to the decade-long yield range.
Kazuo Ueda, BOJ Governor known for his consistent dovish outlooks towards market trends, hinted that if there were substantial reasons indicating that inflation would pick up pace into 2024 then monetary policies could be subject to changes.