Bank of Yokohama, Japan¡¯s largest regional lender, is prepared to pile back into the domestic debt market when the central bank¡¯s peak interest rate is in sight.
The Bank of Japan looks set to stand pat on policy this month, though there¡¯s a ¡°good chance¡± of it raising interest rates in either December or January to 0.75%, according to Hitoshi Inoue, an executive officer who heads the lender¡¯s markets business. For now, the bank plans to stay cautious on Japanese government bonds, he said.
His main scenario is for the BOJ¡¯s rate to peak at 1.25% after an additional hike in the fiscal year starting in April 2026 and another the following year. The BOJ moves would likely lift the 10-year Japanese government bond yield to around 2%, Inoue said. The benchmark rate was at 1.65% in Tokyo on Wednesday.
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