JPMorgan Chase has raised its year-end forecast for the 10-year Japanese government bond yield from 1.55% to 1.7%

JPMorgan Chase Securities has raised its year-end forecast for the yield on Japan's benchmark 10-year government bonds from 1.55% at the end of January to 1.7%, citing potential risks from U.S. policy.

It predicts that the Bank of Japan will raise interest rates in June and December, but actions possibly taken by the United States could complicate matters; if tariffs put pressure on global economic growth, it may hinder the Bank of Japan from raising interest rates, but if Japan is accused of devaluing the yen, it may hastily raise interest rates, wrote Takashi Yamawaki, head of fixed income research and strategist Hiroki Yamamoto in a report on March 10th.

The correlation between ultra-long-term Japanese government bond yields and Bank of Japan policy rates may disappear; after raising interest rates to over 1%, long-term government bond yields may fluctuate sideways. JPMorgan also raised its year-end forecasts for yields on Japanese government bonds with maturities of 20 years and 30 years respectively from 2.15% and 2.40% to 2.35% and 2.65%.