FX.co ★ Japan 10-Year Yield Slides on Haven Bid

On Monday, Japan's 10-year government bond yield fell to approximately 1.12%, marking its lowest point in three months. This decline was driven by growing trade tensions under President Trump's administration, which fueled recession anxieties and led investors to seek the security of government bonds. Last week, President Trump announced unexpectedly high reciprocal tariffs, which provoked retaliatory measures from major global economies. This chain of events resulted in a significant sell-off in equities and commodities and prompted a shift toward safer assets such as the yen, Swiss franc, and government bonds. Meanwhile, within Japan, there was an acceleration in nominal wage growth in February, providing a positive economic outlook amidst global trade uncertainties. While the Bank of Japan is anticipated to continue increasing interest rates this year, the complexities surrounding trade and economic conditions pose challenges to the forecast.