Japan’s Nikkei slipped off a record high as government bonds swung sharply and the yen strengthened. The move followed a hawkish tone from the Bank of Japan, which kept interest rates unchanged. Even without rate hikes, traders reacted to expectations of tighter policy, reshaping the day’s risk sentiment across equities and JGBs.
Japanese government bond yields dropped sharply as investors bought heavily at the beginning of the new fiscal year. The move was reinforced by improving sentiment tied to optimism that the Middle East conflict could de-escalate. With demand lifting bond prices, yields moved lower quickly, reflecting renewed risk appetite and expectations of calmer regional conditions.
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