Japanese government bond futures rose in the morning Tokyo session on Monday, as easing inflation concerns sparked by the U.S.-Iran agreement on an interim peace deal boosted investor sentiment.
The benchmark 10-year JGB futures were 0.42 yen higher at 129.45 yen, according to trading data.
The agreement has already led to a decline in crude oil prices, for which Japan is a major net importer, National Australia Bank Group Chief Economist Sally Auld said in commentary.
“Lower oil prices have eased inflation concerns,” Auld said.
Hopes for a diplomatic breakthrough to de-escalate the U.S.-Iran conflict have pushed oil prices down, she added. The interim peace deal, announced over the weekend, marks a significant step toward reducing tensions that had rattled global energy markets in recent months.
Japan, which relies on imports for nearly all of its oil consumption, is particularly sensitive to shifts in crude prices. Lower energy costs feed directly into producer and consumer price indices, making inflation expectations a key driver for the country’s bond market.