Japan’s 10-year government bond yield rose above 2.21% on Friday, nearing one-month highs after Bank of Japan Governor Kazuo Ueda warned that a weak yen could amplify imported inflation as oil prices climb, potentially pressuring the central bank to accelerate policy normalization. Ueda noted that the impact of exchange rates on inflation appears larger than in the past, giving them greater weight in policymakers’ decisions. Oil prices surged after Iran’s new supreme leader, Mojtaba Khamenei, pledged to keep the Strait of Hormuz effectively closed while Tehran stepped up attacks on regional oil and transport facilities. The Middle East conflict showed no signs of easing, with defiant rhetoric from leaders in Tehran and Washington signaling that the Iran war remains far from de-escalation after nearly two weeks of fighting.
