Japan bond bears are turning their attention to Friday’s inflation data, the next potential catalyst for speculation about looming monetary policy tweaks that would bump up yields.
Moves in Tokyo markets point to an emerging sense of caution about the possibility the Bank of Japan may adjust its control of government bond yields next week, in part because of rising price pressures. The 10-year bond yield has edged up toward the BOJ’s 0.5% ceiling, while the yen has pared its recent weakness against the dollar.
Japan’s consumer price index (CPI) figures from June are expected to show growth in key consumer prices excluding fresh food picking up speed to 3.3% from 3.2%, largely on the impact of higher electricity prices. Stripping out energy costs as well, price gains are seen hovering close to a high of more than four decades, even after cooling for the first time since January 2022 to an expected 4.2%.