TOKYO- The global bond rout that has pressured equities and boosted the safe-haven US dollar showed signs of slowing on Thursday, even as Japanese yields edged to new multi-year highs.
Selling in stocks continued though, with most Asian share indexes ticking down in early trading. The dollar was stable, while oil prices edged lower.
The benchmark 10-year US Treasury yield eased to 4.6749 percent in the latest session, pulling back from the overnight high of 4.73 percent, a peak since April 2024.
Equivalent-maturity Japanese government bond yields started the day by rising 1 basis point to the highest since May 2011 at 1.185 percent, but were flat as of 0202 GMT.
Similar-dated Australian sovereign yields matched Wednesday’s high since late November of 4.546 percent in early trading, but were last at 4.521 percent, up just 1 bp from the previous day’s close.
Whether global bond markets can remain calm may hinge on what happens with UK bonds later in the day, which have been at the center of the selloff as analysts talked of a welling crisis of confidence in Britain’s economic and fiscal health, despite no obvious trigger for this week’s 20-bps surge in 10-year gilt yields
“Some have talked up the possibility of a re-run of the Truss/Kwarteng mini budget episode that resulted in such dramatic scenes in UK gilts in September 2022,” said Chris Weston, head of research at Pepperstone.
“Clearly there is reason to watch the UK bond market intently, and the recent trend is certainly concerning,” he said. “However, we can take some assurances that the BoE (Bank of England) is more prepared this time around.”
Sterling was steady at $1.23625 following its 0.9 percent slump on Wednesday.
The US dollar index which gauges the currency against sterling, the euro and four other major peers, was little changed at 109, sitting not too far from the highest level since November 2022 of 109.54, reached a week ago.
