Japan's Negative Real Rates Hit Yen, Bonds -- Market Talk

1359 GMT - The selloff in the Japanese yen and the country's government bonds reflect the Bank of Japan's inflationary policy, BCA Research's Mathieu Savary says in a note. Japan's real policy rate adjusted for inflation stands at -0.75%, he says. It was only more negative during the global inflation surge that followed the Covid-19 pandemic, he says. Accommodative monetary policy combined with budding inflationary pressure is worrying yen and bond investors as it is forcing the economy to overheat, he says. The yen and bonds face further weakness over 2026, he says. The dollar rises 0.1% to 163.85 yen, having reached a 40-year high of 163.98 last week, LSEG data show. Japan's 10-year yield is little changed at 2.775%. (renae.dyer@wsj.com)

(END) Dow Jones Newswires

July 28, 2026 09:59 ET (13:59 GMT)