After US long-term interest rates temporarily rose to the 5.36% range, they fell as demand surged at the auction on the 7th. Crude oil rose above $100, demand for financing by AI-related companies came into focus, and dollar-yen traded in the ¥157-158 range.
US long-term interest rates temporarily rose to the 5.36% range this week, but strong demand at the 10-year Treasury auction on the 7th and the 30-year Treasury auction on the 8th sent long-term rates lower. This suggests that buyers of government bonds have returned to some extent.
Oil prices again rose above $100, leaving the market alert to inflation as energy prices increased, while the financing needs of AI-related companies also drew attention. The consumer confidence index fell on the 9th, but the equity market saw expectations for growth in AI-related stocks intersect with concerns about financing costs.
Dollar-yen stayed in the ¥157-158 range throughout the week. While US long-term interest rates remained high, expectations of additional rate hikes in Japan and concerns about yen depreciation combined to keep the yen from moving significantly.
Concerns about the US fiscal deficit and Treasury supply, persistently high crude-oil and refined-product prices, and future inflation fears acted together, complicating the relationship between US long-term interest rates and dollar-yen. Debate over high interest rates continues in government-bond markets worldwide.
Next week, focus will be on movements in the US 10-year Treasury yield, the release of September CPI and market reactions, including corporate earnings. Oil-market developments, the situation in the Middle East and the direction of the yen are expected to come under renewed scrutiny.