Japan’s 10-year government bond yield dropped to around 2.1% on Tuesday, marking a six-week low as uncertainties over US President Donald Trump’s trade policies increased demand for safe-haven debt. Over the weekend, Trump threatened to raise global tariffs from 10% to 15% following a Supreme Court ruling that struck down his reciprocal tariffs, and warned of steeper duties on countries that “play games” with existing trade agreements. Tokyo urged Washington to ensure the ruling would not harm Japanese firms and reaffirmed its commitment to the US trade deal. Japanese yields have also been pressured by optimism following Prime Minister Sanae Takaichi’s landslide election victory earlier this month, with hopes that her expansionary fiscal policies will stimulate growth without straining public finances.
