24 October 2025, 09:42 Japan: 10-Year Yield Muted Despite Accelerating Inflation.
Japan’s 10-year government bond yield was little changed around 1.66% on Friday, remaining sideways throughout the week even even as core inflation accelerated in September for the first time since May. Both headline and core inflation rose to 2.9% from 2.7% in August, driven mainly by higher electricity prices. Meanwhile, rice inflation, which made headlines earlier this year, eased sharply to 49.2% from 69.7%. The data precedes the Bank of Japan’s policy meeting next week, where the central bank is widely expected to keep interest rates unchanged. Markets have delayed expectations for the next rate hike to December at the earliest, with most anticipating it early next year. Separately, speculation is mounting that new Prime Minister Sanae Takaichi will announce a large-scale stimulus package as soon as next month, with reports suggesting it could surpass last year’s 13.9 trillion yen program aimed at easing cost-of-living pressures.
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