The 10-year US Treasury yield briefly surged to 5.13% in the New York bond market on the 23rd. Expectations of an additional Federal Reserve rate hike strengthened, spreading upward pressure on long-term yields to the Tokyo market as well.
The 10-year US Treasury yield, a benchmark for long-term interest rates, surged in the New York bond market on the 23rd, briefly reaching 5.13%. This was its highest level in 19 years and 2 months, since July 2007, apparently reflecting stronger expectations that the Federal Reserve will raise rates again at its next meeting in October.
US economic indicators for September that have already been released showed robust corporate activity, while Federal Reserve Governor Barr said in a speech that “further policy adjustments are likely to be necessary,” underscoring the central bank’s commitment to curbing inflation. Rising oil prices amid tensions in the Middle East and soaring fuel prices in the United States have heightened market concerns.
In the Tokyo market on the morning of the 24th, the yen temporarily weakened to the low ¥158 range against the dollar, while the dollar strengthened, bringing the widening US-Japan interest-rate differential into focus. On the 18th, the government and the Bank of Japan had conducted a “rate check,” asking financial institutions about exchange-rate levels in preparation for foreign-exchange intervention.