Tokyo market sees a “triple sell-off” in bonds, the yen and stocks, with long-term yields rising to their highest level in about 30 years. The move was driven by growing expectations of an early rate hike and rising oil prices.
In Tokyo financial markets on the 18th, the yield on newly issued 10-year Japanese government bonds, a benchmark for long-term interest rates, rose as high as 2.945%, sending bond prices lower. Expectations that the Bank of Japan will raise its policy rate spread, prompting selling across a broad range of government bond maturities. Yields also rose in overseas markets, with the U.S. 30-year Treasury yield reaching the 5.3% range. Rising oil prices further heightened concerns about inflation.
Dollar buying dominated the yen market, with the yen trading at around ¥159.50 per dollar and ¥184.50 per euro. This fueled expectations of higher import costs, making exchange-rate movements a burden on the market.
The Nikkei Stock Average closed the morning session at ¥68,098.54, down ¥1,121.71 from the previous day, as selling spread mainly across semiconductor-related stocks. Overall, bonds, the yen and stocks all weakened at the same time.