Japan's Bond Yields Surge Amid Global Sell-Off

Australian 10-year government bond yields rose to their highest level in two weeks, influenced by an unexpected trade surplus and a cautious stance from the Reserve Bank of Australia concerning future rate cuts. In Japan, 10-year government bond yields surged to over 1.5%, their highest since 2009, driven by a global bond sell-off and a hawkish outlook from the Bank of Japan. Germany's announcement of a 500 billion euro infrastructure fund and changes to borrowing rules sparked the sell-off, impacting global yields. The Bank of Japan indicated that they might raise interest rates further if economic conditions meet their forecasts, contributing to the market's response. Despite these conditions, the BOJ remains accommodative, with only limited reductions in JGB holdings. Market strategists noted that global conditions, rather than domestic factors, were primarily responsible for the upward pressure on Japanese yields.