Interest, Gold & Geopolitics — What the Bond Market Signals Ahead of Tariffs & G7: How Are U.S. Markets and Nikkei 225 Reacting? | Market Commentary for April 20, 2025

While Trump’s tariff policies appeared to be the main theme driving markets, it’s the bond market that is quietly taking center stage.Using 30-year bond yields and bond volatility indexes (Bond VIX) from both Japan and the U.S., a personal model revealed a noticeable shift in Japan’s bond market since late 2024. Meanwhile, U.S. bonds, which had stabilized after years of post-COVID monetary easing, are once again showing signs of volatility in 2025.This instability in the bond market has prompted a flight to safety, with capital flowing into gold. As a result, the bond market has become a key pivot point for risk-on/risk-off sentiment across global assets.Looking ahead, the G7 Summit in June—set to take place in Canada—adds further political context to market dynamics. With sector rotation still favoring domestic-demand stocks, bond signals could hold the clues to where markets move next.“Bonds may be quiet, but they reflect the core of the market.”That was the key realization from this weekend.___I am Japanese.This is English version.