Japan 10-Year Yield Steady After Economic Data

Japan’s 10-year government bond yield held around 1.61% on Friday, hovering near 17-year highs as investors digested a batch of economic reports. July data showed that both industrial production and retail sales fell short of expectations, while Tokyo’s core inflation rate stayed above the Bank of Japan’s 2% target. At the same time, the unemployment rate eased to 2.3% from 2.5% in June, signaling further labor market strength. On the trade front, Japan’s chief negotiator Ryosei Akazawa canceled a planned trip to Washington this week as Tokyo works to resolve issues in its trade deal with the US before finalizing an agreement. Meanwhile, BOJ Governor Kazuo Ueda recently stated wages are expected to rise further amid a tightening labor market, reinforcing expectations that conditions for another rate hike are gradually falling into place. At its July meeting, the BOJ kept interest rates unchanged but raised inflation forecasts while striking a more optimistic tone on the economy.