2025.10.0902:59:45UTC+00Japan 10-Year Yield Holds Near 17-Year High

Japan’s 10-year government bond yield saw a modest decrease, settling around 1.69% on Thursday. Despite this dip, the yield remains near its peak since 2008, amid a backdrop of political developments and disappointing data that have curbed expectations for further tightening by the Bank of Japan. The Conservative party elected Sanae Takaichi, a staunch supporter of Abenomics-style economic stimulus, as its leader. Her victory positions her as a potential future prime minister, intensifying predictions of increased fiscal expenditure and sustained accommodative monetary policy. Simultaneously, real wages experienced a 1.4% decline in August compared to the previous year, marking the eighth consecutive month of decreases as inflation continued to exceed wage growth. Bank of Japan Governor Kazuo Ueda recently indicated the possibility of resuming rate hikes if economic and pricing trajectories stay favorable but expressed caution due to potential downside risks to economic growth. Investors are now focused on upcoming producer inflation data due Friday for further policy direction.