Market volatility, including a rise in U.S. long-term interest rates, following the U.S. presidential election

「In the financial markets, domestic long-term interest rates (the yield on 10-year Japanese government bonds) generally remained around 1.4% at the start of the period despite disruption caused by U.S. tariff policy, then gradually rose amid expectations for a Bank of Japan rate hike and other factors. After the new administration took office in October, rates surged above 2% amid market expectations of yen depreciation and fiscal expansion, ending the period in the 2.3% range.」

「The period ended in the ¥35,000 range due to uncertainty over U.S. tariff policy, among other factors."The market moved into a downward trend against a backdrop of concerns over an economic slowdown caused by U.S. tariff policy, ending the period in the $42,000 range.」

「In the United States, the FRB (Federal Reserve Board) implemented successive rate hikes aimed at containing inflation, and long-term interest rates (the yield on 10-year U.S. Treasuries) rose to above 4%, but declined to around 3.5% from November as expectations for a slower pace of rate hikes strengthened. The U.S. stock market remained weak amid accelerating inflation and rising interest rates. Although the Dow Jones Industrial Average temporarily fell below $29,000 after starting in the $34,000 range, it recovered to the $33,000 range at the end of December against a backdrop of declining long-term interest rates.」

「In the United States, the FRB (Federal Reserve Board) implemented successive rate hikes aimed at containing inflation, and long-term interest rates (the yield on 10-year U.S. Treasuries) rose from approximately 2.3% at the start of the period to above 3% in June. The U.S. stock market remained weak amid accelerating inflation and rising interest rates, with the Dow Jones Industrial Average falling from the $34,000 range at the start of the period to around $30,000 at the end of June.」

「In the United States, expectations of a shift away from monetary easing continued to build amid accelerating inflation, and long-term interest rates (the yield on 10-year U.S. Treasuries) temporarily rose to 1.70%. From late November, rates declined due to the impact of the Omicron variant and other factors, falling to the mid-1.3% range in December. The U.S. stock market was weak at times due to moves by the FRB (Federal Reserve Board) and other central banks toward monetary normalization and the spread of the Omicron variant, but generally remained firm, with the Dow Jones Industrial Average rising to the mid-$36,000 range.」

「In the United States, long-term interest rates (the yield on 10-year U.S. Treasuries) remained relatively stable, but temporarily fell below 1.2% in July. From August onward, they generally continued to move in a relatively narrow range centered on 1.3%. The U.S. stock market remained relatively firm through August, and the Dow Jones Industrial Average renewed its record high above $35,000, but subsequently weakened gradually and fell to below $34,000.」

「In the United States, long-term interest rates (the yield on 10-year U.S. Treasuries) rose to the upper 1.7% range in late March as expectations for an economic recovery driven by large-scale fiscal spending and increased government bond issuance strengthened following the Democratic Party's victory in the presidential election. The U.S. stock market generally maintained its upward trend amid the gradual reopening of economic activity. Although there were temporarily unstable periods as COVID-19 cases increased, the market continued to rise on expectations for an economic recovery, and the Dow Jones Industrial Average renewed its high in the $33,000 range.」

「In the United States, long-term interest rates (the yield on 10-year U.S. Treasuries) had remained low under the continued zero-interest-rate policy, but gradually rose amid expectations for an economic recovery following progress in vaccine development. After the Democratic Party won the U.S. presidential and congressional elections in November, expectations for large-scale fiscal spending and increased government bond issuance intensified, and rates rose to levels approaching above 1%. The U.S. stock market strengthened its upward trend on expectations for fiscal spending following the presidential election, and the Dow Jones Industrial Average broke through $30,000 to renew its all-time high.」

「In the United States, long-term interest rates (the yield on 10-year U.S. Treasuries) generally remained in a relatively narrow range of 0.5%–0.8% as the Federal Reserve Board (FRB) made clear its stance of continuing its zero-interest-rate policy, but declined to levels that briefly approached below 0.5% following, among other factors, a renewed increase in new COVID-19 cases across the southern and western United States.」

「In the United States, long-term interest rates (the yield on 10-year U.S. Treasuries) generally remained in a relatively narrow range centered on the 0.6%–0.7% range. Although they temporarily rose to the mid-0.9% range in early June amid expectations for an economic recovery accompanying the resumption of economic activity, persistent concerns over COVID-19 caused them to decline again to the 0.6% range. The U.S. stock market (the Dow Jones Industrial Average) rose to the mid-$27,000 range in early June as expectations for an economic recovery grew with the phased resumption of economic activity, but the pace of the resumption and recovery slowed as COVID-19 cases increased, particularly in southern and western states, leaving the market struggling in the $25,000 range.」

「In the United States, long-term interest rates (the yield on 10-year U.S. Treasuries) fell sharply in response to the FRB's rate-cut decision and U.S.-China trade friction, temporarily dropping below 1.5% around late August, but rose to the 1.9% range in October following, among other factors, indications of a pause in rate cuts for the time being. In the U.S. stock market, the Dow Jones Industrial Average temporarily fell below $25,000 during periods of intensified U.S.-China trade friction, but excessive pessimism receded from September, and the market rose to the upper $28,000 range around the end of the third quarter against a backdrop of a strong U.S. economy.」

「In the United States, long-term interest rates (the yield on 10-year U.S. Treasuries) fell sharply in response to the FRB's rate-cut decision and U.S.-China trade friction, temporarily dropping below 1.5%. They turned upward in September, but declined again after mid-month, ending in the mid-1.6% range. In the U.S. stock market, the Dow Jones Industrial Average temporarily fell below $25,000 during periods of intensified U.S.-China trade friction, but excessive pessimism receded in September, and the market rose to near the $27,000 range around the end of the second quarter.」

「In Japan, long-term interest rates (the yield on 10-year Japanese government bonds) generally remained between △0.192% and △0.003%. The Nikkei Stock Average reached a year-to-date high in the ¥22,000 range in late April, then weakened to the ¥20,000 range at one point amid concerns over U.S.-China trade friction, before recovering to the ¥21,000 range by the end of the quarter on positive sentiment toward the U.S.-China rapprochement at the G20 summit. In the foreign exchange market, the yen appreciated to the upper ¥106 range against the dollar at one point as the Japan-U.S. interest-rate differential narrowed. In the United States, long-term interest rates (the yield on 10-year U.S. Treasuries) declined to below 2% at one point in June after the FRB (Federal Reserve Board) shifted its stance toward rate cuts against a backdrop of escalating tensions with China and low domestic inflation. The U.S. stock market (the Dow Jones Industrial Average) temporarily fell below $25,000, but rose to near $27,000 amid expectations for monetary easing and strong corporate earnings.」

「In the United States, long-term interest rates (the yield on 10-year U.S. Treasuries) rose to above 3.2% at one point, but declined to the 2.4% range by fiscal year-end as the market priced in the possibility of rate cuts, reflecting the U.S. FRB's cautious stance on rate hikes amid growing uncertainty over the economic outlook. The U.S. stock market (the Dow Jones Industrial Average) rose to nearly $27,000 in October, then fell sharply toward year-end, temporarily dropping below $22,000 in December, before recovering to around $26,000 by fiscal year-end.」

「In the United States, long-term interest rates (the yield on 10-year U.S. Treasuries) rose to above 3.25% at one point, but subsequently declined to below 2.70% as the market began to price in, to some extent, the possibility of a pause in rate hikes from 2019. The U.S. stock market rose to nearly $27,000 against a backdrop of firm economic conditions, then fell sharply, ending the third quarter in the $23,000 range.」

「The Nikkei Stock Average remained range-bound due to escalating U.S.-China trade friction and uncertainty over U.S. trade policy, but rose to the ¥24,000 range after September on expectations for strong corporate earnings and gains in U.S. stocks, ending the trading period there. In the United States, expectations of steady rate hikes became increasingly priced in, and long-term interest rates (the yield on 10-year U.S. Treasuries) rose to the 3% range.」

「The Nikkei Stock Average rose to ¥23,000 on expectations of solid corporate earnings, but share prices, particularly those of export-related companies, fell amid uncertainty over U.S. trade policy, temporarily falling below ¥21,500. In the United States, as inflation returned toward 2%, expectations of steady rate hikes became increasingly priced in, and long-term interest rates (the yield on 10-year U.S. Treasuries) rose to the 3% range in May. Thereafter, they generally remained in the 2.80% range amid concerns over trade friction and weakness in emerging markets. The U.S. stock market (the Dow Jones Industrial Average) remained firm through mid-June on expectations for corporate earnings, including the effects of tax cuts, but subsequently fell to below $24,000 at one point as risk reduction intensified.」

「In the United States, in response to the economic recovery, the FRB (Federal Reserve Board) implemented a 0.25% rate hike in December, following the hike in June. Long-term interest rates (the yield on 10-year U.S. Treasuries) declined in the first half of the fiscal year, but rose to as high as 2.5% toward year-end following, among other factors, the enactment of tax reform legislation, ending the third quarter in the 2.4% range. The U.S. stock market (the Dow Jones Industrial Average) generally maintained an upward trend and reached a new high.」

「In the United States, long-term interest rates (the yield on 10-year U.S. Treasuries) declined from August, but turned upward after the September FOMC (Federal Open Market Committee) indicated, among other things, the possibility of a rate hike in December, ending the second quarter in the 2.3% range. The U.S. stock market (the Dow Jones Industrial Average) generally maintained an upward trend and reached a new high.」

「Overseas, the U.S. economy remained firm, although expectations for the new administration's economic policies receded. In the United States, long-term interest rates (the yield on 10-year U.S. Treasuries) generally remained in the 2.1%–2.4% range. Although the U.S. stock market (the Dow Jones Industrial Average) experienced periods of increased volatility in response to international developments, it generally maintained an upward trend and ended the quarter in the $21,000 range.」

「Overseas, in November, the U.S. economy continued to expand moderately as expectations for economic policy increased following the outcome of the U.S. presidential election. U.S. long-term interest rates (the yield on 10-year U.S. Treasuries) rose sharply after the election, reaching the 2.6% range at one point. U.S. share prices also rose toward year-end, and the Dow Jones Industrial Average ended the third quarter near $20,000.」