Japan 10-Year Yield Holds at 4-Week Low

Japan’s 10-year government bond yield held around 1.48% on Wednesday, hovering near a four-week low as soft wage data reinforced concerns over the country’s economic outlook. Real wages in Japan declined for the sixth consecutive month in June, as inflation continued to outpace pay growth, a trend that clouds the Bank of Japan’s policy trajectory. The data added to uncertainty over future rate hikes, with the central bank facing a delicate balance between persistent inflation, weak wage momentum, and global trade risks. Meanwhile, minutes from the BOJ’s June meeting indicated policymakers remain open to further tightening if trade tensions ease. A Ministry of Finance official stressed the need for flexibility, particularly in managing bond purchases to ensure market stability. Last week, the BOJ kept interest rates steady but raised its inflation outlook, while warning of growing downside risks from external developments.