The yield on Japan’s 10-year government bonds remained steady at 1.51% on Monday, reflecting relative market stability despite escalating international trade tensions. This stability comes as U.S. President Donald Trump announced an increase in tariffs on steel and aluminum imports to 50% starting June 4, which could place additional pressure on major Japanese steel producers such as JFE Holdings and Kobe Steel.
Despite these challenges, Nippon Steel received some support due to optimism surrounding its proposed merger with U.S. Steel—a proposal that received public endorsement from Trump, helping to ease negative sentiment around the company’s stock.
Meanwhile, tensions with China are intensifying after Beijing rejected Trump’s accusations of violating an agreement reached in Geneva last month, further diminishing the likelihood of near-term diplomatic engagement between the U.S. and Chinese presidents.
Domestically, economic data showed that capital spending in Japan exceeded expectations in the first quarter, with gains recorded across both manufacturing and services sectors. This indicates resilient corporate investment activity in Japan despite global disruptions.
