Japan’s 10-year government bond yield surged past 1.37%, marking its highest level since April 2010. This spike comes as investors react to strong economic growth data, reinforcing expectations of a shift in the Bank of Japan’s (BOJ) monetary policy stance.
Japan’s GDP expanded by 0.7% quarter-on-quarter in Q4, surpassing forecasts of 0.3% and improving from 0.4% in Q3. On an annualized basis, the economy grew 2.8%, indicating a sustained recovery. The positive macroeconomic indicators have fueled speculation that the BOJ could raise interest rates in March, with more hikes expected later this year.
Market participants are now focused on Japan’s consumer inflation data, scheduled for release on Friday, which could provide further clues on the central bank’s policy outlook. Rising yields may also put pressure on the Japanese yen (JPY) in the forex market, as rate differentials with other major economies continue to narrow.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors should conduct their own due diligence before making investment decisions.