2025.12.1904:13:42UTC+00Japan 10-Year Yield Nears 2-Decade High

Japan's 10-year government bond yield rose to approximately 2% on Friday, reaching heights not witnessed in nearly two decades after the Bank of Japan elevated its benchmark rate to its highest point since 1995. The central bank increased rates by 25 basis points to 0.75% as it cautiously shifts away from its ultra-loose monetary policy, responding to inflation that has persistently exceeded targets over a prolonged period. In November, headline inflation slightly decreased to 2.9% from October’s 3%, yet remained above the Bank of Japan’s 2% target for the 44th straight month. Core inflation remained constant at 3%. The BOJ also forecasted that businesses are expected to continue implementing steady wage hikes in 2026, buoyed by improving corporate profits. Meanwhile, Prime Minister Sanae Takaichi, known for advocating less restrictive monetary policies, reportedly emphasized to a business association on Wednesday that Japan should prioritize proactive fiscal spending over excessive tightening to foster growth and bolster tax revenues.