FX.co ★ Japan 10-Year Yield Rises on Fiscal Concerns Ahead of Election

Japan's 10-year government bond yield climbed above 1.55% on Monday, reaching a seven-week peak as fiscal concerns intensified before the Upper House election on July 20. Speculation is mounting that policymakers might opt for increased fiscal spending to bolster the economy, with discussions underway regarding a potential reduction in the consumption tax. Economically, Japan saw its core machinery orders decline by 0.6% in May to ¥913.5 billion compared to the previous month. Although this figure remained negative, it represented an improvement from the steep 9.1% drop experienced in April and exceeded market projections of a 1.5% decrease. Investors also monitored global trade activities closely after U.S. President Donald Trump declared a 30% tariff on imports from the European Union and Mexico, set to take effect on August 1. In reaction, the European Union is reportedly stepping up dialogues with other affected nations, such as Canada and Japan, considering coordinated responses.