FX.co ★ Japan 10-Year Yield Rises After PMI Data

On Monday, Japan's 10-year government bond yield rose above 1.42%, breaking a three-day downward trend as investors responded to robust business activity data. The June Purchasing Managers’ Index (PMI) figures indicated a resurgence in manufacturing growth, marking the first positive change since May 2024, while services continued to expand for the third consecutive month, underscoring sustained momentum in economic activity. Recent data highlighted an acceleration in Japan's core inflation for the third month running in May, reaching 3.7%, which is the highest since January 2023. This ongoing inflationary pressure has bolstered expectations that the Bank of Japan might persist with its monetary tightening. Concurrently, investors kept a watchful eye on escalating geopolitical tensions in the Middle East. Over the weekend, the United States conducted airstrikes on three Iranian nuclear facilities, aligning with Israel's ongoing conflict with Tehran, thereby heightening concerns over potential retaliation and increased regional instability.