Lower crude supported 10-year JGB futures in Tokyo trade, while investors awaited the BOJ’s Outlook Report, Governor Kazuo Ueda’s guidance on rate timing, and possible currency-intervention risks if the yen weakens further.
Benchmark 10-year JGB futures rose 0.44 yen to Y127.23 in early Tokyo trading as lower crude prices supported expectations of softer inflation in Japan. Attention is centered on the Bank of Japan’s policy meeting, where markets widely expect rates to be left unchanged, while investors watch the quarterly Outlook Report, policymakers’ voting behavior and Governor Kazuo Ueda’s comments for clues on the timing of the next rate hike. The yen has remained under pressure near 165 per dollar, with analysts warning that a dovish message could push it weaker still and revive the risk of foreign-exchange intervention. OIS pricing cited in the reports implied roughly a 29% chance of a hike by September and around 78% to above 80% by October, though Bloomberg’s economist survey showed half expect the BOJ to wait until December.