China’s 10-year government bond yield rose toward 1.74% on Tuesday, rebounding from the previous session as investors remained cautious about the broader economic outlook despite stronger-than-expected trade data. Exports surged 19.4% year-on-year to a record USD 376.8 billion in May, supported by inventory accumulation to offset higher shipping and energy costs stemming from the Gulf conflict, and by AI-related product booms. While the conflict in the Middle East has not yet materially disrupted exports, signs of domestic economic slowdown continue to leave the country exposed to a global downturn. Imports rose 27.4% to USD 271.4 billion, beating forecasts of 25% as companies ramped up purchases of foreign chips and equipment. Consequently, China's trade surplus widened to USD 105.4 billion, its highest level since January. Meanwhile, China is due to launch a third tranche of 15 billion yuan-denominated bonds in Hong Kong on June 16.