Japan’s markets fell on the 10th against a backdrop of rising long-term U.S. Treasury yields and higher oil prices. The Nikkei average fell below ¥60,000, while the dollar/yen rate rose to the mid-¥153 range. Escalating tensions in the Middle East also weighed on markets.
The Nikkei average fell below ¥65,000, declining temporarily to the mid-¥64,000 range. The decline was attributed to rising long-term U.S. Treasury yields and higher oil prices weighing on investor sentiment. In the bond market, futures and long- and super-long-dated bonds fell, while in the foreign-exchange market, dollar buying and the unwinding of yen short positions continued.
The expansion of the U.S. Treasury buyback program announced by Treasury Secretary Bessent fell short of market expectations, and rising U.S. yields weighed on Japanese stocks. Market participants view the direction of long-term yields as dependent on fundamentals and monetary policy, and are turning their attention to next week’s FOMC meeting.
The dollar/yen rate remained elevated at times amid concerns about yen appreciation, and some market participants said levels above ¥150 could be expected. Nomura Securities’ view was cited in an analysis that the yen’s level against the dollar would mark a turning point in companies’ ability to achieve their earnings forecasts.