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Japan PM rejects link between blueprint and JGB selloff

Japan said bond yield and yen moves reflected multiple factors, including U.S. rates, and cited weaker June machinery orders alongside a firmer services backdrop.

Reported · Written up by our desk · Central Banks

Japanese Prime Minister Sanae Takaichi pushed back on claims that an unapproved government economic blueprint triggered a recent JGB selloff that drove bond yields to multi-decade highs, according to commentary summarized by FXStreet.

BNY’s Geoff Yu said Takaichi argued there was no direct link to the market shock, saying interest rates and FX moves were shaped by multiple factors, including U.S. rates and employment data.

Japan’s June machinery orders showed weakness month over month, with core private sector orders excluding ships and electricity falling 12.4%, and the three-month moving average staying negative at -4.8% m/m.

At the same time, Japan’s tertiary industry activity index rose 1.1% m/m and 1.5% y/y, FXStreet noted, with gains across areas including information and communications, finance and insurance, and retail trade.

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