Japan's 10-Year Bond Yield Hits 30-Year High as Asian Markets Trade Mixed
Japan's 10-year government bond yield climbed to 3.06%, its highest since 1996, as Asian equities traded mixed amid a global bond sell-off and geopolitical uncertainty.
Japanese government bonds came under heavy selling pressure on Thursday as Tokyo markets reopened after a three-day break, with the benchmark 10-year yield surging to its highest level in three decades. The yield rose 8 basis points to 3.06%, a mark last seen in August 1996, while the 30-year yield added 5.5 basis points to reach 4.12%.
The move tracked a sharp overnight sell-off in US Treasuries, where the 10-year yield held at 5.11% after touching its highest since 2007. Bond yields across major economies have been climbing as traders price in further central bank tightening to combat persistent inflation.
Asian equity markets reflected the crosscurrents. The MSCI Asia ex-Japan index slipped 0.64%, while Japan's Nikkei 225 gained 1.73%. Australian shares fell to a more than three-month low, with the S&P/ASX 200 dropping 1.2%.
Investors were also weighing a high-stakes diplomatic moment between Washington and Beijing. Chinese President Xi Jinping arrived in the United States for his first visit in nearly three years, greeted personally by President Donald Trump at Joint Base Andrews in Maryland. Treasury Secretary Scott Bessent said the two sides had reached a deal to extend their 11-month trade truce, though the trip was not expected to produce major breakthroughs.
Geopolitical tensions in the Middle East kept energy markets on edge. Iranian officials communicated with US envoys at the UN General Assembly, but both sides signalled little progress toward ending the conflict. Trump reiterated threats of further escalation, while Iran's president vowed not to yield. Brent crude fell 1% to $102.05 a barrel, and US West Texas Intermediate slipped 0.74% to $91.48.
Federal Reserve Governor Michael Barr said on Wednesday that the central bank's recent rate hike was part of efforts to recalibrate borrowing costs and signalled more increases may be needed. Markets awaited speeches from New York Fed President John Williams and Fed President Beth Hammack later on Thursday.
In currency markets, the dollar index edged down 0.04% to 101.09, the euro slipped 0.02% to $1.14, and the yen strengthened 0.24% to 157.91 per dollar. Spot gold gained 0.35% to $4,301.89 an ounce. Bitcoin rose 0.07% to $84,288.53, while Ether climbed 0.46% to $2,683.24.
On the economic data front, the US Labor Department was expected to report that initial jobless claims rose to 201,000 in the week ended September 19, while continuing claims likely increased by 15,000 to 1.745 million. New home sales were forecast to edge up to 615,000 units in August from 607,000 in July. European futures pointed lower, with Euro Stoxx 50 futures down 0.33%, DAX futures off 0.33%, and FTSE futures 0.35% lower.