Eurozone Bonds Rise Amid US-Japan Trade Pact Hopes

Eurozone government bond yields rose on Wednesday, buoyed by a new trade agreement between Japan and the United States. This development renewed hopes for further trade deals and allayed some concerns about the negative impacts of U.S. tariffs on the European economy.

Germany's 10-year government bond, a benchmark for the euro area, saw its yield increase by 3 basis points to 2.62%, reflecting investor response to recent trade developments. U.S. President Trump's deal with Japan avoided harsh tariffs for Tokyo in exchange for a substantial investment package directed to the U.S.

As bond markets adjusted to the evolving trade dynamics, analysts turned their attention to June PMIs and the ECB's potential rate decisions. With geopolitical and economic uncertainties still looming, market participants are debating the future rate outlook amidst ongoing global trade tensions.

(With inputs from agencies.)