FX.co ★ Japan 10Y Yield Slips Despite Strong Trade Data

Japan’s 10-year government bond yield eased to around 2.6% on Wednesday, retracing part of the previous session’s advance despite stronger-than-expected trade data and a recent central bank rate hike. Official data showed that Japanese exports surged 17% year-on-year in May, the fastest pace since November 2022, driven by robust demand for automobiles and semiconductors. The figures came on the heels of the Bank of Japan’s decision on Tuesday to raise its policy rate by 25 basis points to 1% in an effort to curb inflation and shore up the weakening yen. The move, however, met resistance from some board members, including Toichiro Asada, who argued that downside risks to growth and employment outweigh the upside risks to inflation.