FX.co ★ Japan 10-Year Yield Falls to 4-Week Low

Japan's 10-year government bond yield fell to approximately 1.45% on Thursday, reaching a four-week low. This decline was prompted by renewed tariff threats from U.S. President Donald Trump, which increased the demand for safe-haven assets. President Trump announced his intention to send letters to trading partners within the next one to two weeks, outlining unilateral tariffs designed to pressure countries into new trade agreements. Japanese yields mirrored the downward trend in U.S. Treasury yields, following U.S. inflation data that came in below expectations, thereby reinforcing predictions of more Federal Reserve rate cuts this year. In Japan, business sentiment continued to weaken in the second quarter, largely due to growing uncertainty over U.S. trade policy and its effects on Japan's export-driven economy. Furthermore, Bank of Japan Governor Kazuo Ueda reiterated to parliament on Tuesday the central bank's readiness to raise interest rates again, should there be sufficient confidence that the underlying inflation is moving sustainably towards the 2% target.