Japan 10Y Yield Hits Three-Week High Amid Rate Hike Bets

The Japanese 10-year government bond yield has risen to its highest level in three weeks, surpassing 2.8% on Monday.

This increase comes as investors bet on another interest rate hike from the Bank of Japan (BOJ), following last week's decision to maintain the policy rate at 1%. The BOJ had hiked rates by 25 basis points in June, keeping borrowing costs at their highest level since September 1995.

Despite the unchanged policy rate, the BOJ acknowledged upside inflation risks stemming from demand-driven price pressures linked to the conflict in the Middle East. Governor Kazuo Ueda emphasized the need for vigilance regarding higher inflation's potential adverse effects on the economy.