News about Japan

Japanese government bond yields eased on Monday morning as investors sought safety after losses in U.S. tech shares, with the 10-year yield at 2.9%, according to Reuters. The Nasdaq Composite fell 2.1% and the S&P 500 lost 1.1% in Friday's U.S. session; AP linked the selloff to concern that companies borrowing to expand AI may struggle to sustain spending as global bond yields rise. Prime Minister Sanae Takaichi told parliament the government would manage the total amount of bond issuance. The Bank of Japan raised its uncollateralized overnight call rate target to around 1.25% from around 1% on Sept. 18, and Governor Kazuo Ueda said underlying inflation was “quite close” to the 2% target. The BOJ's next policy meeting is scheduled for Oct. 29–30.

BOJ Governor Kazuo Ueda said underlying inflation is “quite close” to the 2% target, as strong global AI demand and a tight job market add price pressure, signalling room for further rate hikes. He stressed that raising rates at an appropriate pace would help avoid spikes in bond yields, while failing to adjust could push long-term rates higher. The BOJ's two-day meeting concludes on October 30, but after its September hike, many policymakers are cautious about another move this month. According to sources cited by Reuters, many market players expect rates to hold at 1.25%, with hints of a possible rise to 1.5% as early as December. JGB yields have risen as concerns grow that Prime Minister Sanae Takaichi's big spending plans could worsen Japan's already strained finances.

Japanese Prime Minister Sanae Takaichi has rejected criticism that she is responsible both for the weak yen and for pushing up interest rates. Speaking in parliament in response to opposition lawmaker Yoshifumi Hamano about a second supplementary budget, she said she clearly denied the accusations and that her government will build confidence in the yen through a strong economy. The yen has weakened to its lowest since 1986 and government bond yields have hit multi-decade highs, prompting Tokyo and even Washington to intervene in the currency market. Takaichi said she will appropriately control bond issuance, and Bloomberg reported that total issuance for 2026 will remain unchanged from the original budget plan, though experts were skeptical. Monex's Jesper Koll has said that spending cannot rise without increasing debt.

Japan's government is reportedly considering raising corporate tax to fund a rise in defense spending, according to Japan Today citing sources familiar with the matter. The option comes as Japan revises three key security policy documents by year-end, which would likely push defense outlays above 10 trillion yen (about $63 billion) annually. The next five-year plan, covering fiscal 2027 through 2031, will focus on large-scale drone procurement and securing ammunition and missiles for a prolonged conflict, with a rough official estimate putting total spending at 70 trillion to 80 trillion yen. Businesses may resist a tax increase over concerns about wage growth and international competitiveness, and it remains unclear whether enough revenue can be raised. Defense spending for fiscal 2023 through 2027 is projected at about 43 trillion yen, and the 2% of GDP target for fiscal 2027 was reached ahead of schedule in fiscal 2025 after Sanae Takaichi became prime minister.

Japanese stocks fell sharply on Monday, reversing part of the previous session's gains after weak cues from Wall Street. The Nikkei 225 dropped 900.46 points (1.38%) to 64,423.83 after touching a low of 63,831.78, led by heavyweights and technology stocks, with Taiyo Yuden plunging more than 7% and SoftBank down more than 4%. On Wall Street, the Nasdaq fell 572.99 points (2.1%) to 26,140.03, the S&P 500 lost 84.62 points (1.1%) to 7,659.44, and the Dow slipped 175.28 points (0.3%) to 52,002.41. European markets rose, with Germany's DAX up 1%, the FTSE 100 up 0.4% and the CAC 40 up 0.3%. WTI crude for November delivery rose $3.33 (3.4%) to $101.30 a barrel, topping $100 for the first time in a month as Iran re-escalated attacks in the Strait of Hormuz.

Burger King Japan said an intruder accessed its member management server without authorization from October 2 to October 7, 2026, before the breach was detected. An investigation completed on October 13 found that 11.18 million customer records were at risk of leaking, including full names in Kanji and Kana, dates of birth, gender, email addresses, phone numbers, prefecture of residence and app order-history tags. The company said no credit card or bank payment information was stored in the system, and its access logs showed no evidence that account passwords were stolen. Burger King has blocked the unauthorized access, reported the incident to Japan's Personal Information Protection Commission (PPC) and police, and warned customers about scam calls, texts and emails impersonating the brand.

The Nikkei 225 opened October 19 at 404.78, down 2.1% from the previous close of 413.41 in the first minutes of Tokyo trading. The drop comes as the Bank of Japan has already signaled it cannot tolerate underlying inflation running above 2%, leaving limited room for policy to cushion a selloff. Yen-sensitive exporters, which are among the most widely held Japanese stocks by international funds, are expected to feel the impact first. The article notes that the Tokyo open can set the tone for the broader Asia session.

Japan is set to launch the Martian Moons eXploration (MMX) mission on Tuesday aboard an H3 rocket from the Tanegashima Space Center, led by the Japan Aerospace Exploration Agency (JAXA). The spacecraft aims to land on Phobos, one of Mars' two moons, collect surface material and return samples to Earth, which would be the first such return from a Martian moon if successful. The mission consists of three modules carrying sampling equipment, scientific instruments and two ultra-high-definition cameras, and is expected to reach Mars about a year after launch before roughly three years of observation. The return module is due to deliver the samples during Japan's fiscal year ending in March 2032. The total development cost is estimated at 55.3 billion yen, or nearly $350 million.