Japan’s 10-year government bond yield climbed to around 1.82%, approaching fresh 17-year highs amid growing expectations that the Bank of Japan could raise interest rates in December in response to persistently high inflation. Several BOJ officials have signaled the possibility of an imminent rate hike, citing the inflationary impact of a weakening yen. Governor Kazuo Ueda has also stressed the need for further data on wage growth while noting how a weaker yen could affect underlying inflation. Meanwhile, Japan’s cabinet recently approved a 21.3 trillion yen stimulus package aimed at boosting economic growth and supporting households facing inflationary pressures. The package is the largest since the Covid-19 pandemic and far exceeds last year’s 13.9 trillion yen supplementary budget, raising concerns over Japan’s fiscal health.