Japan 10-Year Yield Rises After Weak Trade Data

Japan’s 10-year government bond yield rose toward 1.58% on Thursday, following weaker-than-expected trade figures. The trade surplus shrank to JPY 153.1 billion in June 2025, from JPY 221.3 billion a year earlier and well below the forecasted JPY 353.9 billion. Exports fell 0.5% year-on-year to JPY 9,162.6 billion—marking a second consecutive monthly decline and missing expectations for a 0.5% rise—amid evolving US tariffs. The ongoing weakness in exports has heightened concerns that Japan’s economy may contract in Q2, potentially pushing it into a technical recession. Meanwhile, imports inched up 0.2% to JPY 9,009.5 billion, defying expectations for a 1.6% drop and marking the first increase in three months. Investors are now turning their attention to the upcoming Upper House election on July 20, amid growing speculation that the government may unveil new fiscal stimulus measures, including increased public spending or even a cut to the consumption tax, in a bid to spur growth.