Japan long-term bond yields surge past 2.6% as inflation runs hot
Japan's 10-year government bond yield surged past 2.6% as sticky inflation and the lingering Iran-war energy shock continue to weigh, Nikkei Asia reported. Pressure on the Bank of Japan to raise rates further is intensifying.
Japan's 10-year government bond yield climbed above 2.6% as sticky core inflation and the energy price shock tied to the Iran war continued to bite. According to Nikkei Asia, the 30-year yield has also risen by roughly 80 basis points since the start of the year.
The latest data showed core inflation running above expectations and broader price pressure spreading through the services sector. Volatility in the yuan and other Asian currencies is squeezing exporter margins. Markets are pricing a possible additional 25-basis-point hike from the Bank of Japan at its next meeting.
The move in long-end yields raises questions about public debt-service costs and pension-fund rebalancing. Investors across Asia are watching for sudden moves in the yen and for any unusual selling of Japanese government bonds. The Japanese banking index opened higher.
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