As the first full trading day since The BoJ shifted policy ever-so-gently, Japanese bond yields have blown out, spiking to 11bps. At the same time, Chinese stocks and Yuan are sliding on the heels of Trump’s tariff escalation.

It seems no one was interested in buying 10Y JGBs as Kuroda faces his first test…

“The market is more likely to test an upside to bond yields sooner or later given the BOJ allows wider deviations in the 10-year yield, and the yen will probably strengthen during the process,” Kato said.

The policy tweak “points to a distant-future exit and thus is a catalyst for yen strength in the medium-to-long term.”

This is the widest intraday range since 2016…

The offshore yuan slipped as China weakened its fixing for the currency to the lowest since May 2017.

“The tariff issue is ongoing, I think it’s a negotiating tactic,” Nick Griffin, chief investment officer at Munro Partners, said on Bloomberg Television.

“How much we take of this as real and affecting earnings is questionable at this stage. In terms of an actual earnings effect, it’s not that big at the moment, it’s mainly just sentiment and risk appetite and for that it’s a moving feast.”

And that is continuing to weigh on Chinese stocks at the break…

And US Futures have been unable to rebound for now…