Japan’s 10-year government bond yield rose above 1.42% on Tuesday, marking its second consecutive gain as US President Donald Trump’s announcement of a ceasefire agreement between Israel and Iran dampened demand for safe-haven bonds. Markets also shrugged off Iran’s retaliatory strike on a US military base in Qatar, which caused no casualties, and drew further relief from Tehran’s decision to avoid targeting the strategic Strait of Hormuz. On the domestic front, investors continued to assess the Bank of Japan’s policy outlook. While the BOJ kept its benchmark interest rate unchanged at 0.5% last week, officials signaled a readiness to tighten further, citing sustained core inflation as firms continue to pass wage increases onto prices.
