Inflation concerns and cooling expectations of Fed rate cuts push Japan's 10-year government bond yields to a 27-year high.

Due to inflation pressure triggered by the Middle East war, as well as the weakening effect of strong US employment data on the expectation of early interest rate cuts by the Federal Reserve, Japan's benchmark government bond yields rose to a nearly 30-year high on Monday. The yield on the 10-year Japanese government bond, which serves as the benchmark, rose by 2 basis points to 2.400%, the highest level since February 1999. Yields and bond prices move in opposite directions. US President Trump stepped up pressure on Iran on Sunday, threatening in a profanity-laden social media post on Easter that if the strategic Straits of Hormuz are not reopened by Tuesday, the US military will strike Iran's power plants and bridges. This rhetoric pushed oil prices higher. Data released on Friday showed that non-farm payrolls in the US last month exceeded expectations, with the unemployment rate falling to 4.3%. This reinforces market expectations that the Federal Reserve will maintain interest rates unchanged when evaluating economic growth, inflation, and the economic impact of the Iran war. The 5-year Japanese government bond yield rose by 2 basis points to 1.815%.