08.06.202602:41:27UTC+00Japan 10Y Yield Tracks US Treasury Yields Higher

Japan’s 10-year government bond yield rose to around 2.7% on Monday, its highest level in more than a week, following an uptick in US Treasury yields after strong US employment data reinforced expectations of a Federal Reserve rate hike later this year.

Heightened geopolitical tensions in the Middle East further supported the move, as Iran launched multiple missile strikes toward Israel as a warning against additional Israeli military action in Lebanon. The escalation pushed oil prices higher and intensified inflation concerns.

On the domestic front, the Bank of Japan is widely expected to raise interest rates later this month, with policymakers responding to persistent inflationary pressures linked to elevated energy costs.

Meanwhile, final data showed that Japan’s economy grew 0.5% quarter-on-quarter in Q1 2026, accelerating from 0.2% in the previous quarter. The country also recorded a larger-than-expected current account surplus in April, supported by stronger export growth relative to imports.