FX.co ★ Japan 10-Year Yield Climbs as Trade Tensions Ease

On Friday, Japan's 10-year government bond yield climbed to over 1.27%, driven by a decrease in demand for safe-haven assets as U.S.-China trade tensions eased. China's confirmation of its assessment of trade talk prospects—following multiple overtures from the U.S.—has uplifted global risk sentiment. Concurrently, Japan and the U.S. wrapped up their second round of bilateral trade negotiations this week, with Tokyo targeting a June deadline to secure an agreement. Domestically, Japan's unemployment rate inched up to 2.5% in March, yet the labor market conditions remained relatively robust. On the monetary front, the Bank of Japan maintained its policy rate at 0.5% on Thursday, while lowering its growth and inflation forecasts. This reinforces expectations that further rate hikes are improbable in the near future.