Japan bond yields continue to surge higher with eyes on the BOJ later this week

The BOJ is poised for a critical monetary policy decision, anticipated to include a rate hike to 0.75%. Amid growing concerns regarding fiscal policies advocated by Finance Minister Takaichi, Japanese bonds have experienced heavy sell-offs, with 10-year JGB yields hitting highs not seen since June 2009. This volatility extends to the Japanese yen, with USD/JPY trading above 155. The BOJ's strategies reflect a continued struggle against governmental pressures, indicating a potentially unstable outlook for both the currency and bond markets. Though specifics may be vague, a rate hike would convey a significant message, especially with upcoming wage negotiations that could further influence BOJ's policy direction.