FX.co ★ Japan 10-Year Yield Jumps on Political Uncertainty

Japan's 10-year government bond yield experienced a notable increase of nearly 10 basis points, reaching approximately 1.59% on Wednesday. This marks a near peak since 2008, driven by mounting political uncertainty surrounding Prime Minister Shigeru Ishiba. The latest auction of 40-year Japanese government bonds saw the weakest demand since 2011. Speculation in the media suggested that Ishiba might soon announce his resignation, despite the recent trade agreement with the United States. However, Ishiba rebutted these claims, asserting he had "never discussed" resigning. Political tensions have escalated following the ruling coalition's loss of its majority in the upper house during the weekend elections. Further contributing to market fluctuations, U.S. President Donald Trump declared a trade agreement with Japan, which includes a 15% tariff on Japanese exports to the United States. Additionally, Trump announced that Japan would invest $550 billion in the U.S. and open its markets to significant American products.