Japan’s 10-year government bond yield fell to around 1.62% on Friday, a four-week low, even after Bank of Japan Governor Kazuo Ueda signaled willingness to raise interest rates if confidence in the economic outlook strengthens. Ueda said he would assess incoming data ahead of this month’s policy meeting, implying the BOJ has not ruled out a near-term move despite lingering political uncertainty and risks from US tariffs. Still, markets assign only a slim chance of a rate hike in October. Meanwhile, investors continued to watch political developments as opposition parties have yet to agree on the ruling Liberal Democratic Party’s October 21 proposal to hold a vote for a new prime minister. Externally, global risk aversion driven by US credit concerns, US-China trade tensions, and the prolonged US government shutdown boosted demand for safe-haven bonds, pushing yields lower.
