2025.12.1803:38:21UTC+00Japan 10-Year Yield Hits Fresh 18-Year High

Japan's 10-year government bond yield hit a peak, surpassing 1.97% on Thursday, the highest since 2007. This surge is driven by growing apprehensions regarding Japan's weakening fiscal position, exacerbated by Prime Minister Sanae Takaichi's proposed spending initiatives. On Wednesday, Takaichi emphasized the necessity for active fiscal strategies to bolster economic growth and enhance tax revenues. Coinciding with this, the Bank of Japan has commenced a two-day policy meeting, during which a 25-basis-point increase in the policy rate to 0.75% is broadly anticipated. This action aims to address persistent inflationary pressures stemming from elevated food prices, which continue to exceed the central bank's 2% inflation target. Governor Kazuo Ueda’s remarks following the meeting will be closely scrutinized by investors for insights into next year’s policy direction amid speculation that interest rates could reach 1% by July.