Asian stocks rally as US Treasury steps in to ease bond fears

Asian markets surged on Thursday following the US Treasury's announcement to double long-term bond issuance, aiming to reduce borrowing costs, reported <source 2b490a5a-3a4>. The surprise move provided much-needed relief for investors concerned about rising 10- and 30-year yields due to elevated inflation, government borrowing, and potential Federal Reserve interest rate hikes.

US equities rebounded higher, while the dollar depreciated against its peers in response to the news. The 30-year US Treasury yield reached its highest level since June 2007, causing worry before the global financial crisis. The move signaled that the Treasury administration is unwilling to tolerate higher US yields. Tech firms, heavily reliant on debt for AI investments, saw significant gains.

Seoul's Kospi index jumped over six percent, led by SK hynix's 12 percent increase following its $29 billion share buyback. Meanwhile, the dollar stabilized after a steep decline, and gold surged above $4,500 for the first time since early June. Investors are now awaiting the outcome of the Fed's July meeting, where some policymakers advocated for rate hikes due to continued economic expansion and AI-driven investment.