Investing.com - Friday saw a significant rise in the yield of Japan’s decade-long government bond, reaching its highest point since March – an increase fueled by rumors that the Bank of Japan (BOJ) may adjust its extremely flexible monetary policy later this month.
The midday break witnessed the 10-year JGB yield slightly dip to 0.480%, but it remained elevated by 1.5 basis points from Thursday's session despite a concurrent drop in U.S Treasury yields.
In contrast to Japanese trends, benchmarked ten-year and two-year treasury yields in the U.S. have hit their lowest levels since mid-June amid easing inflation pressures. This has led to increased speculation about whether or not the Federal Reserve will continue raising interest rates as previously forecasted.
Interestingly, there has been a steep ascent in Japan’s decade-long bond yield starting from last Friday — bolstered by robust growth figures for base salary within Japan which exhibited a jump of 1.8% year-on-year for May - marking it as the most significant surge since February nearly three decades ago.
Persistent wage growth coupled with stubborn inflation are among the crucial indicators being closely watched by BOJ while contemplating when and how they should pull back their highly relaxed monetary stimulus measures.