FX.co ★ Japan 10-Year Yield Drops Amid Haven Demand

The yield on Japan's 10-year government bonds fell sharply by nearly 10 basis points to approximately 1.39% on Thursday. This decline occurred as investors sought safer assets following the announcement of significant reciprocal tariffs by U.S. President Donald Trump. These measures have intensified the ongoing global trade conflict and could impede economic growth. Trump introduced an additional 34% tariff on Chinese goods, raising the total tariffs on China to 54%. Additionally, other major economies such as the European Union, Japan, and India are now subjected to tariffs of 20%, 24%, and 26%, respectively, alongside a 10% baseline tariff applied to all imports. Earlier in the week, the Governor of the Bank of Japan, Kazuo Ueda, warned that these new U.S. tariffs could severely disrupt global trade and stability. Although the Bank of Japan is anticipated to increase interest rates later this year, concerns about trade tensions and uncertainty within the domestic economy persist, affecting the economic forecast.