FX.co ★ Japan 10-Year Yield Falls for Second Straight Session

Japan's 10-year government bond yield dipped to approximately 1.43% on Thursday, marking its second consecutive day of decline. This movement reflects increased global uncertainty, which has prompted investors to seek safe-haven assets. The apprehension among investors has been heightened by the intensifying conflict between Israel and Iran, coupled with reports suggesting that the US is preparing for a possible military strike against Iran. Such developments have raised concerns about the potential for broader regional instability and increased US involvement in the Middle East.

Domestically, the Bank of Japan maintained its interest rates on Tuesday, reiterating a gradual approach to reducing its balance sheet. Governor Kazuo Ueda stressed the importance of monitoring both economic conditions and global trade patterns, and indicated the possibility of future rate hikes if necessary.

Meanwhile, the US Federal Reserve, in its recent policy decision, kept interest rates unchanged, adopting a data-driven approach. However, the Fed warned that tariffs imposed by President Trump could potentially reignite inflationary pressures, further contributing to the overall cautious sentiment in financial markets.