FX.co ★ Japan 10-Year Yield Rises Despite Weak Wage Data

On Monday, Japan's 10-year government bond yield surged past 1.45%, reversing the decline seen during the previous session. This rise occurred despite weaker-than-anticipated wage figures, which dampened expectations for further rate hikes by the Bank of Japan. In May, nominal wages increased by only 1%, falling short of market predictions of a 2.4% rise, and marking the third consecutive month of slowdown. When adjusted for inflation, real wages dropped by 2.9%, marking the steepest decline in nearly two years and the fifth consecutive month of decreases. So far, the broader wage data does not yet reflect the significant pay hikes agreed upon in this year's spring labor negotiations, as many smaller, non-union companies have been slow to implement the increases. Additionally, Japanese government bond yields mirrored the upward trend in U.S. Treasury yields, which rose following a stronger-than-expected U.S. jobs report. This eased fears of a recession and lessened the pressure on the Federal Reserve to reduce rates imminently.