NAB Morning Call Could an RBA rise come sooner?
Dec 4, 2025
Skye Masters, a NAB markets economist and strategist specializing in bond markets and central bank policy, shares insights on rising bond yields in Japan and Australia. She explains how Japanese 10-year yields have hit a multi-year high, creating an attractive opportunity for investors. Skye connects surprising Australian household spending figures to expectations of a soon-to-come RBA rate hike, with markets pricing in potential February tightening. The conversation explores the implications of these trends for market dynamics and investor strategies.
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Japan's Bond Yield Repricing
- Japanese government bond yields have risen sharply, reaching 1.94%, the highest since 2007.
- Skye Masters says higher JGB yields reflect market pricing of possible BOJ tightening and have attracted buyers using the move as an entry point.
Australia Yields Reprice RBA Risk
- Australian bond yields have moved materially higher since late October, with three-year and ten-year yields jumping notably.
- Skye Masters highlights the market is repricing the risk that the RBA may need to tighten next year.
Household Spending Signals Consumer Resilience
- October household spending surprised strongly, with goods purchases jumping and monthly spending the strongest since January 2024.
- Skye Masters says this resilience points to a stronger Q4 and increases the chance of earlier RBA tightening.