Japan 40-Year Yield Surges as Traders Question BOJ on Inflation

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Or sign-in if you have an account.A Japanese flag at the Bank of Japan (BOJ) headquarters in Tokyo, Japan, on Tuesday, June 30, 2026. New BOJ Board Member Ayano Sato said the country's inflation views aren't very strong yet, suggesting her tilt toward accommodative policy as an appointee of Prime Minister Sanae Takaichi. Photo by Kiyoshi Ota /Bloomberg(Bloomberg) — Japan’s 40-year government bond yield led gains across maturities, underscoring concerns that the nation’s central bank isn’t tightening policy fast enough to quell inflation.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountThe rate climbed 10 basis points to 4.01%, bringing it closer to its record high of 4.355% reached in May. The five-year yield earlier hit its highest since its debut in 2000. The increases track moves in US Treasuries as higher oil prices boosted bets that the Federal Reserve will raise interest rates.Bank of Japan officials are open to raising interest rates at a faster pace than the consensus among economists, as the yen’s continued weakness adds to upside inflation risks, according to people familiar with the matter. Yet half of economists surveyed by Bloomberg still expect the central bank to wait until December to lift rates, with Prime Minister Sanae Takaichi’s government seen as a key obstacle to further action.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againRead: Japan’s Inflation Picks Up, Keeping BOJ on Path for Rate Hikes“The market is focusing on the BOJ’s slow response to rising oil prices, prompting investors to demand a higher premium to hold longer bonds amid concerns that Japan faces relatively elevated inflation risks,” said Ataru Okumura, chief rates strategist at SMBC Nikko Securities. “Yields will likely continue to rise as concerns over fiscal expansion intensify ahead of the government’s finalization of its sales tax cut proposal in early August.” Takaichi’s administration approved an economic and fiscal policy plan this week that touches on ambitious investment goals while citing the independence of the central bank and leaving unresolved the issue of a costly sales tax cut on food. Without details of how the government will secure its targeted investment or how it will fund the likely sales tax cut and ramped-up defense spending, the plan provides little relief for market participants concerned about the nation’s longer-term debt trajectory. Bonds across the globe are being pummeled by the latest resurgence in energy prices, delivering losses to investors who bet the worst of this year’s rout was over and teeing up credibility tests for central bankers. The US 30-year yield is just below the highest since 2007, and UK gilt yields this week set their longest period of daily closes above 5% in almost two decades.—With assistance from Masahiro Hidaka.This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.