A government bond, typically issued in a country’s own currency, is a loan to the government by investors. The interest rate, called the yield, reflects investors’ expectations of inflation and the risk of the government not repaying the debt. These bonds are sometimes called sovereign bonds when issued in foreign currencies.
Japan’s 10-year bond yields dropped to their lowest point in three weeks, mirroring a global trend as investors wait for clues about future interest rates. The decline comes after Japan’s unexpected recession, which has dampened hopes for tighter monetary policy from the Bank of Japan (BOJ). While some analysts predicted the BOJ might end its negative interest rate policy due to rising inflation and wages, the bank has signaled a cautious approach to any future rate hikes. This week’s economic data releases, including inflation figures and industrial production figures, will be closely watched for further guidance on the economic and monetary policy landscape.
Source: https://tradingeconomics.com/