Japan’s 10-year government bond yield fell to around 2.33% on Wednesday, its third consecutive decline, mirroring the movement in US Treasury yields amid expectations of a possible de-escalation in the Middle East. President Trump said US forces would end operations in Iran “very soon,” indicating a timeframe of two to three weeks. He added that Iran is “begging to make a deal,” but stressed that whether an agreement is reached is “irrelevant” to the US withdrawal schedule.
Earlier, Iranian President Masoud Pezeshkian stated that Tehran had the “necessary will” to end the war, provided it received guarantees that hostilities would not resume.
On the domestic front, the Bank of Japan’s sentiment index for large manufacturers rose to 17 in Q1 2026, its highest reading since Q4 2021, indicating that business confidence remains resilient despite the ongoing geopolitical tensions. Meanwhile, the Manufacturing PMI for March was revised up to 51.6 from an initial estimate of 51.4, though still lower than February’s near four-year high of 53.
