Japanese government bond yields rose across the curve as hawkish signals from the Bank of Japan and growing inflation concerns tied to the Middle East war pushed investors to rethink the path of future rate hikes. The move reflects a rapid shift in market expectations, with yields climbing broadly rather than in just one maturity segment.
Japan’s core inflation slipped under the Bank of Japan’s 2% target for a second straight month in March, aided by subsidies and softer food prices. But the underlying trend remains firm, while rising oil costs and geopolitical risks could reignite price pressures. That mix is leaving policymakers cautious on the timing of future rate decisions.
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