FX.co ★ Japan 10-Year Yield Surges on US-China Trade Optimism

On Monday, the yield on Japan's 10-year government bonds climbed towards 1.4%, reaching its highest point in over five weeks. This increase was triggered by alleviating trade tensions between the US and China, which led to a reduced demand for safe-haven assets. The yield's ascent followed negotiations over the weekend in Switzerland, where US officials advocated for an agreement aimed at diminishing the trade deficit. In parallel, Chinese authorities referred to the outcome as a "significant consensus." Despite this progress, US Commerce Secretary Howard Lutnick announced that the existing 10% baseline tariff on other nations is expected to persist for the foreseeable future. Market participants are also closely observing the ongoing trade negotiations between the US and Japan, with Tokyo striving to finalize an agreement by June. Domestically, Japan reported a current account surplus of 3.45 trillion yen in March, after achieving a record 4.06 trillion yen surplus in February, indicating sustained robustness in the country's external balance.