By Japan’s 10-year government bond yields have climbed to near 16-year highs, reaching 1.25%, as investors brace for rising inflation and potential shifts in monetary policy. The surge in yields reflects growing concerns over the Bank of Japan’s (BOJ) ultra-loose policy stance.
Analysts suggest that the BOJ may soon reconsider its long-standing policy of keeping interest rates near zero. “The bond market is responding to the likelihood of more restrictive monetary measures,” said one economist.
The rise in yields has also weighed on Japanese equities, with the Nikkei 225 index falling 1.5% in early trading. Investors are closely monitoring the BOJ’s next moves, as any policy shift could have far-reaching implications for global markets.