It is premature to conclude that the Bank of Japan will increase its ten-year government bond yield target in line with rising US Treasury yields. Fiscal dominance, meaning the extent to which fiscal deficits constrain monetary policy, is weighing on the central bank’s independence. With a long road to recovery ahead, even greater collaboration between the government and central bank cannot and should not be ruled out. We look for a widening divergence between Japanese and US government bond yields, all the way down the curve. Refresh the chart in your browser | Edit chart in Datastream Benefiting from global