FX.co ★ Japan 10-Year Yield on 3-Day Decline

Japan's 10-year government bond yield experienced a decline, reaching approximately 1.55% on Friday. This marked the third consecutive session of decrease, following the release of the latest inflation figures. June 2025 saw headline inflation slightly ease to 3.3%, down from May's 3.5%; however, it remains above the Bank of Japan's 2% target for the 39th month in a row. This persistent breach of target levels has fueled expectations that the central bank may consider adopting a tighter monetary policy. Concurrently, data released on Wednesday revealed a reduction in Japan's trade surplus for June, failing to meet expectations as exports decreased for the second month, while imports rose slightly. These developments have cast a shadow over Japan's economic prospects, particularly amid escalating trade tensions. The situation is compounded by the upcoming imposition of a 25% US tariff on Japanese goods, effective August 1, which adds to the current duties on auto exports—Japan's primary export to the United States. Investors are now turning their attention to Japan's upcoming Upper House election, which is slated for July 20, 2025.