FX.co ★ Japan 10-Year Yield Rises Despite Tariff Threats

On Wednesday, the yield on Japan’s 10-year government bond rose to approximately 1.42%, recovering from a seven-week low observed during the previous session. This increase occurred as investors evaluated escalating trade tensions and domestic economic indicators. The shift followed a statement by U.S. President Donald Trump, who threatened a 35% tariff on Japanese imports. This action is intended to coerce Tokyo into making trade concessions. Trump labeled the trade discussions with Japan as “really hard,” reiterating criticism of Japan's resistance to US cars and rice. These comments are significant as a crucial deadline approaches, with markets attentively observing whether Japan will secure a trade agreement with Washington before the potential reimplementation of a 24% reciprocal tariff next week. Concurrently, earlier this week, domestic data revealed an unexpected rise in business confidence among large manufacturers for the second quarter, indicating resilience despite increasing external pressures.