Japan’s 10-year government bond yield climbed 2 basis points to around 1.96% on Monday, rising for the second straight session as investors prepared for the Bank of Japan’s policy meeting this week. The central bank is widely expected to raise its policy rate by 25 basis points to 0.75%. Market attention will also focus on Governor Kazuo Ueda’s post-meeting remarks for guidance on next year’s policy trajectory, with analysts projecting the policy rate could reach 1% by July. Expectations for tighter monetary policy have been supported by robust economic data, including consumer inflation remaining above historical levels. Reports also indicate that senior officials in Prime Minister Sanae Takaichi’s cabinet are unlikely to oppose a rate increase, citing concerns that a weak yen is driving higher import costs and inflation. Additionally, central bank data showed sentiment among large manufacturers rose to +15 in Q4 from +14 in Q3, the highest reading in four years.
