Japan’s 10-year government bond yield slipped to around 1.43% on Thursday, declining for the second consecutive session as heightened global uncertainty drove demand for safe-haven assets. Investor nerves were rattled by the escalating conflict between Israel and Iran, with reports indicating the US is preparing for a potential strike on Iran—raising fears of broader regional instability and deeper US involvement.
Adding to the cautious mood, the US Federal Reserve held interest rates steady and signaled a data-dependent approach, warning that President Trump’s tariffs could fuel a resurgence in inflation. On the domestic front, the Bank of Japan also left rates unchanged on Tuesday and reiterated a gradual approach to balance sheet reduction. Governor Kazuo Ueda emphasized that the BOJ is closely watching both economic conditions and global trade trends, keeping the door open for future rate hikes if needed.
