Japan 10-Year Yield Tracks US Treasury Yields Lower

Japan’s 10-year government bond yield declined to around 1.49% on Thursday, pulling back from multi-week highs as it tracked a broader drop in US Treasury yields. The move followed minutes from the Federal Reserve’s latest meeting, which showed most policymakers were open to interest rate cuts later this year. Sentiment was also shaped by rising trade tensions as the US-Japan negotiations appear to have stalled, particularly over Japan’s protection of its rice market. US President Donald Trump recently announced a 25% tariff on Japanese goods, effective August 1, and ruled out any extension to the deadline. Japanese Prime Minister Shigeru Ishiba described the measures as “truly regrettable” but reaffirmed Tokyo’s commitment to continue discussions with Washington in search of a mutually beneficial agreement. A local think tank estimates the tariff could reduce Japan’s GDP by 0.8% in 2025 and by 1.9% cumulatively through 2029.