Japan 10-Year Yield Falls to Near 4-Week Low

Japan’s 10-year government bond yield slipped to around 1.55% on Tuesday, marking a near four-week low as it tracked declines in US Treasury yields amid rising expectations for deeper Federal Reserve rate cuts. Investors awaited major revisions to US employment figures for April 2024 to March 2025, with economists forecasting downward adjustments of up to 800,000 jobs, suggesting the Fed may be behind the curve in meeting its full-employment mandate. Traders currently assign an 89% probability of a 25 basis point cut next week, with some positioning for a larger 50 basis point move. On the domestic front, markets continued to weigh the political fallout from Prime Minister Shigeru Ishiba’s resignation after mounting rifts within the ruling party and pressure from his election defeat late last year. The resignation also coincided with setbacks in Japan’s efforts to finalize a trade agreement with the US.