FX.co ★ Japan 10-Year Yield Rises for Third Session

Japan's 10-year government bond yield climbed above 1.45% on Friday, continuing its upward trend for the third consecutive session. This increase is driven by domestic data surpassing expectations, leading to speculation of a more assertive approach from the Bank of Japan. Specifically, household spending saw a significant rise of 4.7% year-over-year in May, recovering from a marginal 0.1% decline in April and outpacing projections of a 1.2% growth. This surge occurred as Tokyo accelerated initiatives to boost consumer spending. Additionally, Japanese Government Bond (JGB) yields mirrored the upward movement in US Treasury yields following a strong US employment report, which allayed concerns of an economic downturn and reduced the likelihood of imminent Federal Reserve interest rate reductions. However, trade-related uncertainties remained as President Donald Trump announced intentions to start issuing formal notifications on tariffs. This could potentially introduce new unilateral tariffs or extend existing deadlines. Previously, he had threatened to increase tariffs on Japanese products by up to 35%, citing insufficient Japanese purchases of American rice and automobiles.