"This week Japan's bond market suffered a major selloff, with yields hitting an all-time high. 10-year yields spiked to 2.2%, while 30-year yields hit 3.66%. While the onset of the selloff can't be pinpointed, it is likely a combination of geopolitical tensions and simmering concerns about Prime Minister Sanae Takaichi's ¥21.3 trillion ($134 billion) economic plan to bolster Japan's debt-heavy economy."
"The 5% threshold is a concern for investors because it's the point at which holding U.S. debt is comparable to the returns on stocks. "What's particularly troubling is ... when bonds and stocks move together in price, then bonds are no longer a hedge for your equity portfolio, and they lose a substantial part of what makes them so special in constructing a portfolio," Griffin said."
Japan's bond market experienced a major selloff, pushing 10-year yields to 2.2% and 30-year yields to 3.66%. The selloff likely reflects geopolitical tensions and investor unease about Prime Minister Sanae Takaichi's ¥21.3 trillion economic plan for a debt-heavy economy. Citadel CEO Ken Griffin warned that weak fiscal positions can trigger bond-market backlash and cautioned the United States as yields approach 5%. A 5% yield would make U.S. debt returns comparable to stocks, reducing bonds' value as a stable, low-risk portfolio component. U.S. Treasuries were unsettled after President Trump's tariff threats tied to Greenland prompted speculation about European demand for U.S. debt, and Treasury Secretary Scott Bessent reported concerns after a Deutsche Bank note drew private apologies.
Read at Fortune
Unable to calculate read time
Collection
[
|
...
]