US and Japanese bond yields fell after softer-than-expected CPI data increased bets on Federal Reserve rate cuts, possibly starting by September. US May CPI came in below forecasts across key indicators, with core inflation reaching its lowest annual rate since 2021.

Inflation in the US ticked higher to 2.4% in May, slightly up from 2.3% in April, marking the first increase in four months.

The US 10-year Treasury yield steadied at 4.47% as investors awaited the CPI report for inflation insights and monitored US-China trade negotiations.