Japan’s 10-year government bond yield remained near 2.77% on Wednesday, staying close to its three-month low. Investors continued to favor safer assets amid ongoing weakness in technology and artificial intelligence stocks, along with rising political uncertainty in the US. Early midterm election polls suggested a potential Democratic takeover of both chambers of Congress, sparking concerns over stricter AI regulations, increased corporate oversight, and possible cuts in government spending.
Market participants are now awaiting Japan’s wage data, set to be released later this week, for further insights into the Bank of Japan’s monetary policy outlook. Last week, the BOJ kept its benchmark interest rate at 1.25% but signaled that underlying inflation had hit its 2% target, hinting at a possible rate hike as early as December.