Concerns about inflation and cooling expectations of Federal Reserve rate cuts, Japan's 10-year government bond yield rises to a 27-year high

Inflationary pressures triggered by the Middle East war, along with strong U.S. employment data that weakened expectations of an early rate cut by the Federal Reserve, pushed Japan’s benchmark government bond yields up to a near 30-year high on Monday. The 10-year Japanese Government Bond (JGB) yield used as the benchmark rose by 2 basis points to 2.400%, the highest level since February 1999. Yields move inversely with bond prices. On Sunday, U.S. President Trump increased pressure on Iran, posting an expletive-laden social media message on Easter Day that warned: if the strategic chokepoint Strait of Hormuz is not reopened by Tuesday, U.S. forces will strike Iran’s power plants and bridges. The remark drove oil prices higher. Data released on Friday showed that U.S. nonfarm payrolls increased by more than expected in the previous month, and the unemployment rate fell to 4.3%. This reinforced market expectations that the Federal Reserve will keep interest rates unchanged while assessing the economic impact of economic growth, inflation, and the war with Iran. Toutiao. The 5-year Japanese Government Bond yield rose by 2 basis points to 1.815%.

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Editor: Yongsheng Wang