BOJ Meeting Triggers Hawkish Sentiments in Japan Bond Market

Japan's long-term government bond yield has risen to 2.800% on inflation concerns, sparking caution in the market ahead of the Bank of Japan's (BOJ) monetary policy decision. The benchmark yield on newly issued 10-year Japanese government bonds (JGBs) increased by 0.005 percentage point from the previous day.

The BOJ began its two-day meeting on July 30 and is widely expected to hold its policy rate steady, as it assesses the impact of last month's rate hike. At its previous meeting in June, the BOJ raised its policy rate to around 1.0%, a level not seen in approximately 31 years.

Investors are closely watching what signals the BOJ sends regarding the weak yen and price trends, both in its policy statement and at Governor Kazuo Ueda's press conference. A hawkish stance could put further upward pressure on long-term yields.