Japan’s 10-year government bond yield fell to around 1.2% on Tuesday, driven by increased safe-haven demand for Japanese bonds amid rising tariff threats from US President Donald Trump and a selloff in US technology stocks.
Japan 10-year yield falls on haven demand
On Monday, Trump announced plans to impose tariffs on imported chips, pharmaceuticals, steel, aluminum, and copper in a bid to boost domestic production. At the same time, US artificial intelligence and related stocks experienced significant losses as concerns grew over the potential impact of Chinese startup DeepSeek’s free, open-source AI model on the dominance of US AI leaders.
BoJ effect
Meanwhile, the Bank of Japan raised interest rates by 25 basis points to 0.5% in January, marking the highest short-term borrowing costs in 16 years. The central bank also projected that inflation would reach its 2% target in the latter half of its forecast period, signaling the possibility of further rate hikes.
