Japanese government bond yields continue to rise as the market expects the central bank to continue raising interest rates

According to Jinshi, Japanese government bond yields continue to climb. The 10-year yield rose 5.3 basis points to 1.085%, reflecting that Japanese government bond yields continue to steepen driven by higher long-term interest rates. The market expects the Bank of Japan to raise interest rates by 28.5 basis points cumulatively this year (up from +27 basis points last Friday). However, the yen has continued to depreciate since last Friday. Deutsche Bank market analysts pointed out that low volatility supports the attractiveness of the yen, a low-yield funding currency, in carry trades, which may continue to drive the yen weaker at this stage.