US EditionStocks Shaken by Geopolitical Fears, Japanese Bonds Bounce After Selloff
Japanese government bond yields surged nearly 19 basis points in two days, raising fears of a leveraged carry trade unwind and prompting shifts in U.S. and European bond markets.
- The surge in Japan’s borrowing costs on Tuesday sent volatility through global bond markets, with ten-year Japanese government bond yields up almost 19 bps and 30-year yields posting their biggest daily jump since 2003.
- On Monday, Prime Minister Sanae Takaichi announced a snap election set for February 8 and is campaigning on a proposed two-year food tax pause, stoking fears of bigger deficits and more fiscal spending, analysts warn.
- Investor flows into and out of U.S. assets intensified, with Danish pension fund AkademikerPension planning to sell $100 million of U.S. Treasuries, said Mantas Vanagas.
- U.S. long-term yields climbed, with 30-year Treasurys up around 7 bps to 4.91 per cent, while gold surged 2.1 per cent to $4,865 an ounce.
- The BoJ meeting on Friday could be pivotal as policymakers may flag tightening soon, while concerns about the carry trade and European governments' defence spending threaten more issuance.
16 Articles
16 Articles
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