Japan's Long-End Bonds Break Loose From Central Bank, Hitch to U.S. Rates

Japan's 10-year government bond yield hit 2.88% on July 8—its highest since the Bank of Japan ditched yield-curve control. The rally was driven by a U.S. Treasury selloff, a pattern dominating JGB direction all year. Tokyo's long bonds now dance to U.S. overnight rates rather than domestic inflation or BOJ signals, reshaping risks for yen-funded carry trades.