Japan 10-Year Yield Steady Amid Weak Trade Data

Japan’s 10-year government bond yield held around 1.59% on Wednesday, pausing a seven-day advance as investors digested weaker-than-expected trade data. Exports fell 2.6% year-on-year in July, the sharpest decline in more than four years as sweeping US tariffs weighed on overseas demand. Imports also contracted 7.5%, marking the fourth decline this year but faring better than expectations for a 10.4% drop. Separately, core machinery orders—a leading indicator of capital spending over the next six to nine months—unexpectedly rose in June, rebounding after two months of declines. On the policy front, markets remain divided over the timing and pace of future Bank of Japan rate hikes amid mixed signals from officials. However, Governor Kazuo Ueda has reiterated a cautious stance, stressing that “underlying inflation” remains below the BOJ’s 2% target.