29.05.202602:51:56UTC+00Japan 10-Year Yield Hits 2-Week Low

Japan’s 10-year government bond yield fell to around 2.65% on Friday, a two-week low, as uncertainty grew over the Bank of Japan’s near-term policy path. Global bond yields also declined after reports that the US and Iran had reached a tentative agreement, easing concerns about inflation and future interest rate increases.

Earlier in the week, BOJ Governor Kazuo Ueda pointed to rising inflation risks stemming from higher oil prices but stopped short of indicating whether a rate hike is under consideration at the upcoming policy meeting. He stressed the need to carefully evaluate how energy-driven price pressures could influence Japan’s underlying inflation trend, while giving no explicit guidance on the timing of any policy shift.

At the same time, recent data painted a picture of a mixed yet generally resilient domestic economy: retail sales grew at their fastest pace in a year, and industrial production posted an unexpected increase.