JGB yields affected by U.S. President Trump’s tariff imposition on additional Chinese goods

The Japanese government bond yields suffered at the cost of an additional tariff imposition by the United States President Donald Trump on Chinese goods, citing, inappropriate progress on trade talks, hinting at further stern decisions, if no conclusion is reached at the earliest.

At close, the yield on the benchmark 10-year JGB note, which moves inversely to its price, plunged 16-1/2 basis points to -0.165 percent, the yield on the long-term 30-year suffered 4 basis points at 0.324 percent and the yield on short-term 2-year slumped 20 basis points to -0.203 percent.

US President Donald Trump has announced a 10 percent tariff on the remainder USD300 billion of Chinese imports starting September 1. The decision was probably aimed at pressurising China for more progress at the second round of trade negotiations in Washington scheduled for early September, DBS Economics & Strategy reported.

The first round of talks in Shanghai had been brief and characterised by mutual criticism. In the currency market, risk aversion was best reflected by the flight to safety into the Japanese yen, and to a lesser extent, the Swiss franc, the report added.

Meanwhile, the Nikkei 225 index slumped -2.25 percent to close at 21,057.00.