TOKYO, Jan 9 (Reuters) – The global bond selloff that has rattled equity markets and bolstered the safe-haven U.S. dollar showed signs of slowing down on Thursday, even though Japanese bond yields reached new multi-year highs.
Asian stock markets remained under pressure, with most regional indexes slipping in early trading. The U.S. dollar held steady, while oil prices edged lower, continuing a volatile market environment.
The benchmark 10-year U.S. Treasury yield retreated to 4.6749% after reaching 4.73% the previous session—its highest level since April 2024. The slight pullback came during a holiday-shortened trading day in the U.S.
Meanwhile, equivalent-maturity Japanese government bond yields initially rose by 1 basis point, reaching their highest level since May 2011 at 1.185%, but stabilized thereafter. Similarly, Australian sovereign bond yields touched a new high for the month at 4.546%, before easing slightly to 4.521%.
The global bond markets remain on edge, with the direction of further volatility likely dependent on developments in the UK bond market later in the day. UK gilts have been at the center of the selloff, as analysts point to growing concerns over the nation’s economic and fiscal stability. Despite no clear catalyst for this week’s 20-basis point surge in 10-year gilt yields, uncertainty surrounding the UK’s fiscal outlook continues to weigh heavily on investor sentiment.
In the U.S., markets are awaiting critical jobs data due on Friday, which could provide further clues about the Federal Reserve’s stance on monetary policy. The ongoing volatility reflects broader concerns about the potential impact of political uncertainty in the U.S., particularly with former President Trump’s ongoing influence on the political landscape.
While the bond market turmoil appears to be losing some momentum, the underlying risks—especially in relation to global economic health and fiscal policies—remain high, keeping investors cautious.
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