18.03.202604:03:39UTC+00Japan 10Y Yield Falls Ahead of BOJ Decision

Japan’s 10-year government bond yield fell to around 2.23% on Wednesday, declining for a second straight session as investors looked ahead to the upcoming Bank of Japan policy meeting. The central bank is widely expected to leave interest rates unchanged while it evaluates how the conflict in the Middle East is affecting Japan’s economy.

At the same time, the BOJ may adopt a more hawkish tone, as a weaker yen and higher oil prices linked to the Iran war are intensifying inflationary pressures in Japan, which relies heavily on crude imports from the region.

On the diplomatic front, Prime Minister Sanae Takaichi is scheduled to meet US President Donald Trump this week, managing a delicate balancing act after Trump initially called on Japan to send warships to the Strait of Hormuz before later retracting the request.

In economic data, Japanese exports rose 4.2% year-on-year in February, beating market expectations of 1.6%. However, the pace of growth slowed markedly from the 16.8% surge recorded in January.