Tradeweb Government Bond Update – April 2026

Set against a backdrop of historic volatility in the first quarter of 2026, global government bond yield moves were largely muted in April.

The once staid Japanese 10-year government bond yield was the biggest mover of the month, rising nearly 17 basis points to end April at 2.52%, just below its three-year high of 2.53%. The Bank of Japan (BOJ) maintained interest rates at its April meeting amid dissenting views from three governors and continued uncertainty about geopolitical events. The central bank's updated Outlook Report revised up inflation forecasts. The Nikkei 225 index surpassed 60,000 for the first time in its history in the second half of the month, while the yen fell to levels last seen in July 2024, prompting Finance Minister Satsuki Katayama to pledge "decisive action" to prevent a further decline. Meanwhile, the final S&P Global Japan Manufacturing PMI reading showed growth hitting a four-year high.

Taichi Shibuya, Head of Japan at Tradeweb, said: "Japanese government bond yields have moved higher in recent months. While global inflation pressures and currency dynamics remain important drivers, the outlook is more dependent on incoming data and geopolitical developments. The BOJ continues to balance rising inflation risks against downside growth concerns, suggesting that policy normalization is likely to remain gradual rather than accelerated."

In the UK, 10-year Gilt yields rose nine basis points to finish the month at 5.01%. The Bank of England left its bank rate unchanged at its April meeting, even though policymakers acknowledged inflationary pressures. The S&P Global Flash UK Composite PMI for April showed one of the biggest monthly increases in output prices in the history of the survey, and data released in early May confirmed the inflationary pressure.

Amid a broad monetary pause that saw the European Central Bank holding rates steady, Germany's 10-year Bund yield climbed just two basis points to end April at 3.03%. In contrast, its peripheral equivalents mostly dropped, with those for Italy decreasing by five basis points over the month to close at 3.86%. Ireland narrowly bucked the trend, as the yield on its 10-year bond rose by nearly half a percentage point to 3.26%.

Across the Atlantic, the 10-year U.S. Treasury yield rose seven basis points to finish the month at 4.39%. The Federal Reserve kept rates at the 3.5%-3.75% target range for the third consecutive meeting, citing uncertainty. However, it too saw notable dissention, with some policymakers opposing what they described as an "easing bias" and others voting for further cuts. Oil prices remained elevated and consumer sentiment measures hit notable lows, but the economy grew at an annualized rate of 2% in Q1 2026, compared to a rate of 0.5% in Q4 2025. The S&P Global U.S. Manufacturing PMI increased to 54.5 in April, the strongest level since May 2022.

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