Trump's Conflict with the Fed Increases Chances of Rising Yields in Japan

Japanese Government Bond Yields: Japanese government bond yields reached record highs, with the 30-year JGB yield hitting an all-time peak of 3.215%, influenced by rising U.S. Treasury yields and concerns over inflation.

Impact of U.S. Monetary Policy: The increase in long-dated Treasury yields reflects expectations of higher inflation due to a potentially more dovish U.S. Federal Reserve, which could prioritize labor market support over controlling consumer prices.

Debt Management Concerns: Japan's Finance Minister announced plans to monitor JGB market movements closely, as the country faces the challenge of managing its significant debt burden, projected at around 250% of GDP.

Political Influences on Markets: Political dynamics, including President Trump's attempts to influence monetary policy and recent electoral defeats for the ruling coalition, are contributing to uncertainty and pressure on JGB yields, with fewer investors willing to buy long-term bonds.