FX.co ★ Japan 10-Year Yield Steady Amid Trade Tensions

On Monday, Japan's 10-year government bond yield remained steady at approximately 1.51%, showing a muted reaction despite the growing global trade tensions. On Friday, U.S. President Donald Trump announced plans to increase tariffs on steel and aluminum imports to 50%, effective June 4. This decision is likely to put pressure on major Japanese steel producers such as JFE Holdings and Kobe Steel. However, Nippon Steel experienced some support, buoyed by optimism surrounding its proposed merger with US Steel, which has received Trump's public endorsement. Meanwhile, tensions with China escalated as Beijing dismissed Trump's assertion of a breach of the trade agreement achieved in Geneva last month, further diminishing the prospects of an imminent conversation between Trump and Chinese President Xi Jinping. On the domestic front, data revealed that Japan's capital expenditure surpassed expectations in the first quarter, with notable increases in both manufacturing and non-manufacturing sectors. This suggests a robust underlying strength in corporate investment.