Japan's 5-year government bond yield reached 1.60% on January 5, marking its highest level since June 2007. This rise follows Bank of Japan (BOJ) Governor Kazuo Ueda's indication that the central bank will continue raising interest rates if economic conditions align with forecasts. The BOJ recently increased its policy rate to 0.75%, the highest in 30 years, as part of its strategy to phase out prolonged monetary support. Governor Ueda emphasized the likelihood of moderate increases in wages and prices, suggesting that adjusting monetary support will foster sustained economic growth. The BOJ's upcoming quarterly outlook report, scheduled for January 22-23, is expected to provide further insights into the board's views on inflation and the impact of recent yen depreciation. Meanwhile, Japan's 10-year bond yield also hit a 27-year high, reflecting market expectations of continued rate hikes. In a related development, Finance Minister Satsuki Katayama announced 2026 as "Digital Year Zero," supporting the integration of digital assets into traditional exchanges. This move aims to institutionalize cryptocurrency trading, with the Financial Services Agency proposing to reclassify 105 cryptocurrencies as financial products, creating a unified regulatory framework.