Japanese 10-year government bond yields have surged to near 16-year highs, reaching 1.25%, as investors react to rising inflation concerns and the potential for tighter monetary policy. The yield on the benchmark bond has not been this high since 2009.
The surge in yields reflects growing expectations that the Bank of Japan (BOJ) may soon adjust its ultra-loose monetary policy. “The bond market is signaling a shift in sentiment,” said one economist.
The rise in yields has also impacted Japanese equities, with the Nikkei 225 index falling 1.5% in early trading. Investors are closely watching the BOJ’s next moves, as any policy shift could have significant implications for global markets.
