Japanese government bonds rebounded sharply on Wednesday after a severe selloff the previous day that sent super-long yields, including the 40-year tenor, to record highs and triggered ripples across global debt markets.
Finance Minister Satsuki Katayama urged calm, highlighting Japan’s responsible fiscal policy, low reliance on debt issuance, rising tax revenues, and the smallest deficit among G7 nations.
Traders viewed the worst of the meltdown as potentially over, though elevated yields persisted amid ongoing fiscal concerns tied to recent political developments.
Global markets showed mixed signs of stabilisation, with US equity futures rising modestly and Treasuries edging higher after sharp prior losses, while Asian shares extended declines and European stocks eyed a tepid open.
Safe-haven assets such as gold and platinum hit fresh records amid persistent uncertainty.
Adding to tensions, President Donald Trump’s threats of tariffs on several European countries over their opposition to his push to acquire Greenland unsettled investors, compounding strains from the Japanese bond rout and broader US policy unpredictability.
Analysts noted an eroding tolerance for shocks, with potential for near-term disruptions from escalating trade and territorial frictions as Trump heads to the World Economic Forum in Davos.
Gold is slipping slightly after hitting a high of $4,888 overnight.
UK CPI y/y was released earlier at 3.4% versus a 3.3% forecast.
Later today: WEF Annual Meetings, US Pending Home Sales, and remarks from President Trump.
