Japan's 10-year government bond yield is projected to rise to approximately 3.1% in the latter half of fiscal year 2027, according to economists from Daiwa Research. This increase is attributed to the Bank of Japan's interest rate hikes and quantitative tightening measures. Additionally, Prime Minister Hayashi's expansionary fiscal policy could exacerbate inflation concerns and increase government bond issuance, potentially driving yields higher. Currently, Japan's bond yields have decreased due to falling oil prices, with the 10-year yield recently dropping 7 basis points to 2.690%.