Japan’s 10-year government bond yield slipped to around 2.17% on Tuesday, down from 2.23% in the previous session, as declining energy prices eased pressure on the country’s oil-import-dependent economy. Domestic yields also retreated as cheaper oil tempered concerns about a resurgence in inflation, reducing the perceived likelihood of near-term rate hikes by major central banks.
The move in bond markets followed remarks by US President Donald Trump, who said the US military operation in Iran was nearing its conclusion and announced plans aimed at keeping oil prices in check.
On the domestic front, Japan’s fourth-quarter GDP growth was revised up to 0.3% from an initial estimate of 0.1%, driven by robust domestic demand. Earlier data also showed real wages rising for the first time in 13 months, bolstering the Bank of Japan’s case for continuing the normalization of monetary policy and giving the government greater room to advance key policy priorities.
