Tradeweb Government Bond Update – July 2025
Global government debt market yields mainly saw increases across the board in July, particularly those for the Japanese 10-year benchmark bond, which reached a 17-year high during the month before closing six basis points higher than in June at 1.55%.
Taichi Shibuya, Head of Japan at Tradeweb, said: “Investor demand for Japan’s 40-year government bond auction fell to its lowest level in 14 years, amid heightened political uncertainty surrounding Prime Minister Shigeru Ishiba’s potential resignation. The yield on the 10-year benchmark bond climbed to a 17-year high of 1.60% on July 23, following a series of pivotal developments in the Japanese economic and political landscape. Adding to volatility, a weaker yen and downward pressure on global trade weighed on investor appetite for long-dated securities, with markets experiencing a sell-off in the super long-end of the yield curve.”
Elsewhere in Asia Pacific, the Australian 10-year benchmark bond yield dropped by almost five basis points to 4.21% at month-end. The country’s inflation rate fell to 2.1% in Q2 this year from 2.4% in the prior two quarters, marking its lowest figure since Q1 2021. On July 8, the Bank of Australia voted to keep interest rates unchanged at 4.25%.
It was a busy month in the U.S., with the release of economic data, the Federal Reserve interest rate decision, and the global tariffs deadline on August 1. U.S. nonfarm payrolls rose by 73,000 in July, falling short of market expectations of 110,000, while the June figure was revised down significantly from an initial 147,000 to just 14,000. The country’s GDP in Q2 this year grew by 3%, rebounding from 0.5% in the first quarter. Finally, the Federal Reserve maintained interest rates at a range of 4.25% to 4.5%, and the U.S. 10-year Treasury yield climbed 13 basis points to 4.36% during the month.
After seven consecutive cuts, the European Central Bank also maintained its interest rate at 2% in July, and the German 10-year Bund yield rose nearly nine basis points to finish at 2.69%. The HCOB Germany Manufacturing PMI dropped slightly to 49.1 during the month from 49 in June, pointing to a continued deterioration in manufacturing business conditions. According to preliminary estimates, the country’s annual inflation rate remained unchanged at 2%.
Similarly, the annual inflation rate in Italy and France was projected to stay at 1.7% and 1% in July, respectively. The yield on the Italian 10-year government bond increased by six basis points to 3.53% at month-end, while its French equivalent climbed seven basis points to 3.34%. The HCOB France Manufacturing PMI came in at 48.2, slightly above June’s figure of 48.1.
Across the English Channel, the UK 10-year Gilt yield increased by seven basis points to 4.57%. The S&P Global UK Manufacturing PMI rose to 48 in July from 47.7 in the previous month, and the GfK Consumer Confidence Index decreased by one point from June’s figure to -19 in July. The UK’s annual inflation rate rose to 3.6% in June, the highest reading since January 2024.
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