Today: Sell-off of government bonds – Tracking in New York and Tokyo
In the US, the yield on ten-year government bonds rises to 5.2 percent, in Japan to 3.1 percent. Chief economist Martin Schulz and correspondent Antonia Mannweiler on the reasons and consequences.
Analysts expect yields on long-term government bonds in the US and Japan to continue rising due to new interest rate hikes by central banks. Martin Schulz, chief economist at Fujitsu in Tokyo, notes that bond markets have woken up to demands for higher returns given higher risks and inflation. The strategy of Japanese Prime Minister Sanae Takaichi seems to be working so far, with the economy growing faster and enabling Japan to service its debt despite rising yields.
However, this has also led to delays in important structural reforms. In contrast, the US government is more nervous, as it has a large and short-term refinanced debt, making it more vulnerable to higher yields.
Written by urgent.news from Handelsblatt's report — not a translation of it. Machine-written — may contain errors; check the original before relying on it.
