Tokyo – Japan‘s 10-year government bond yield climbed to a new decade high on Monday, fueled by growing anticipation of a potential policy shift by the Bank of Japan and ongoing political uncertainty. The yield reached 0.77%,marking its highest level as January 2014,as investors brace for a possible adjustment to the BOJ’s yield curve control policy.The upward pressure on yields reflects a confluence of factors.Expectations for a near-term rate hike by the BOJ have intensified following recent economic data indicating sustained inflation and robust wage growth. While Washington’s previously erratic trade policies prompted the BOJ to pause rate hikes, that uncertainty has gradually receded. This shift in sentiment, coupled with a recent reshuffling within Prime Minister Fumio Kishida’s cabinet, has added to market volatility and prompted a reassessment of the BOJ’s ultra-loose monetary policy.
The potential for policy normalization by the BOJ would have broad implications for Japanese investors, businesses, and the global financial landscape. Higher yields could increase borrowing costs for companies and consumers, potentially dampening economic growth. Conversely, it could offer greater returns for institutional investors and strengthen the yen.Jada Nagumo and lisa Kim of Nikkei Asia reported the developments on September 8, 2025, at 06:00 JST. Market participants are closely monitoring upcoming BOJ meetings and economic data releases for further clues about the central bank’s intentions. The next BOJ policy meeting is scheduled for[Date-[Date-[Date-[Date-facts not provided in source], where policymakers are expected to provide updated forecasts and signals regarding the future of monetary policy.
