FX.co ★ Japan 10-Year Yield Rises as Haven Demand Eases

Japan's 10-year government bond yield rose to approximately 1.35% on Friday, poised to conclude the week on a higher note. This movement came as global trade tensions eased, reducing the appeal of safe-haven assets. This shift was prompted by comments from US President Donald Trump, who affirmed that trade discussions with China were proceeding, despite Beijing's official denials. Further optimism stemmed from signs of progress in negotiations with Japan and South Korea. Contributing to this positive shift, President Trump withdrew his earlier criticism of Federal Reserve Chair Jerome Powell, clarifying that he never intended to replace him. This development helped stabilize policy expectations and diminish uncertainty. Domestically, data revealed Tokyo's core inflation surged to a two-year high of 3.4% in April, highlighting the challenges faced by the Bank of Japan as it navigates rising inflationary pressures alongside external trade risks. The central bank is widely anticipated to maintain its current interest rates at the upcoming policy meeting.