Japan’s 10-year government bond yield climbed to around 2.1% on Friday, rebounding after a brief dip in the previous session, as investors continued to price in further Bank of Japan interest rate hikes. Data showed household spending in November rose unexpectedly by 2.9%, supported by winter-related purchases and easing inflation pressures. However, data on Thursday showed that real wages fell 2.8% in November as inflation outpaced wage growth, posing a challenge to the BOJ’s tightening plans. Earlier this week, Governor Kazuo Ueda reiterated that the central bank would continue raising rates if economic and price developments remain in line with forecasts. Meanwhile, an auction of 30-year Japanese government bonds saw strong investor demand amid elevated yields, alleviating some market concerns.
