2026.01.1504:01:27UTC+00Japan 10-Year Yield Eases as BOJ Outlook Mulled

On Thursday, Japan's 10-year government bond yield decreased by approximately 3 basis points to 2.15%, retreating from levels last seen almost 27 years ago. This dip occurred despite Bank of Japan Governor Kazuo Ueda's affirmations to the markets that interest rate hikes would proceed if economic conditions and inflation align with expectations. Ueda noted that recent market fluctuations, prompted by speculation that Prime Minister Sanae Takaichi might announce a snap election next month, have not deterred the Bank of Japan from its rate increase intentions. Takaichi is anticipated to push for a snap election to further expansionary fiscal strategies, resulting in downward pressure on bond prices and the yen due to the potential increase in debt-financed government spending. In the meantime, the central bank is largely expected to maintain its current policy stance in the upcoming week, with the market forecasting the subsequent rate hike to occur around June.