Japanese government bond prices fell during the morning Tokyo session as a strong Tankan business survey (quarterly corporate sentiment survey) raised expectations for a faster pace of Bank of Japan rate hikes. Ten-year JGB yields rose 2.5 basis points to 3.085%. Capital Economics’ Marcel Thieliant said business conditions were at their most favorable in decades, which should support continued tightening. The survey also did not ease the BOJ’s concerns about upside inflation risks, and Thieliant said the firm maintained its view that the central bank will raise its policy rate to 2% by mid-2027. Market data showed BOJ 8301 down 0.83%.