China has initiated restrictions on the exports of rare earths and magnets to Japan, WSJ reports citing sources.

• Source adds that the review of the application for export licenses to Japan has been paused. The restrictions extend across Japanse industry, not just defense.

China's export restrictions on rare earths and magnets to Japan signal an escalation in trade tensions, impacting not only defense sectors but a broad range of Japanese industries. This move could influence global supply chains and increase volatility in metal markets, particularly as these materials are critical for various technologies. Traders should monitor the potential ripple effects on commodities and related sectors, especially if this trend prompts further retaliatory measures or supply constraints.