In early Tokyo trading, JGB prices dropped following a potential technical correction after Monday’s gains. The move reflects growing uncertainty around the looming deal to resolve the U.S.-Iran conflict, which could keep oil prices higher and sustain inflation in Japan. With the 10-year JGB yield rising by 2 basis points to 2.710%, investors are reassessing risks.

Analysts note this development underscores how geopolitical timelines intersect with monetary policy, potentially influencing central bank expectations and rate decisions. This shift highlights the delicate balance between market sentiment and macroeconomic forecasts.