The yield on Canada’s 10-year government bond held near 3.42% as markets absorbed the Bank of Canada’s decision to keep the policy rate unchanged at 2.25% and reaffirm that inflation is moving back toward target. Softer core inflation readings and January projections pointing to CPI staying close to 2% reduced the perceived need for further near-term tightening and encouraged investors to trim long-end yield premia. Broader declines in global real yields also weighed on Canada’s curve through cross-border duration demand and easier swap pricing. Domestic positioning amplified the move as investors who had reduced duration during earlier risk-on phases re-entered long positions following the Bank’s guidance, while portfolio rebalancing into government bonds supported prices. In parallel, higher gold prices and a broader tilt toward defensive assets reinforced the pull toward lower real yields.