Global bond sell-off deepens as Japanese yields jump
‘Relentless’ pressure on sovereign debt comes amid uncertainty about interest rate rises
The Japanese Yen (JPY) reached a weekly low against the US Dollar (USD) on Thursday, as elevated bond yields bolstered the USD to a two-month high. The USD/JPY pair surged beyond the 158.00 level, driven by strong bullish sentiment around the USD. Market expectations for an October Federal Reserve rate hike were dampened by a weaker-than-anticipated Personal Consumption Expenditures (PCE) report for August.
Meanwhile, US bond yields remained elevated due to oil-driven inflation risks and geopolitical tensions between the US and Iran. US President Donald Trump's refusal to accept Iran's ceasefire proposal and his potential return to combat after the November midterm elections further fueled the safe-haven USD. The Bank of Japan's anticipated rate hike in October or December could limit JPY losses and prevent USD/JPY from reaching higher levels.
Traders are closely monitoring the US economic calendar, including the Weekly Initial Jobless Claims, ISM Manufacturing PMI, and influential FOMC members' speeches, with the upcoming Nonfarm Payrolls (NFP) report on Friday expected to provide significant clues about the Fed's policy direction.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
This story
This is one outlet's version. Read the fullest account.
