FX.co ★ Japan 10Y Yield Falls for Second Session

Japan’s 10-year government bond yield fell to around 2.25% on Wednesday, extending its decline for a second consecutive session as oil prices retreated on renewed hopes for a ceasefire in the Middle East. The pullback in energy costs eased concerns about inflationary pressure on Japan’s import-dependent economy. The move in bond yields followed reports that the United States was intensifying diplomatic efforts to end the conflict with Iran, though investor skepticism remained elevated after Tehran denied participating in any negotiations with Washington. Earlier this week, data showed that Japan’s core inflation rose 1.6% in February, the slowest pace since March 2022, as government support measures helped alleviate living costs. Last week, the Bank of Japan left its policy rate unchanged but maintained a tightening bias to address inflationary pressures linked to persistently high oil prices.