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Business Recorder
8 hours ago
- Business
- Business Recorder
JGB yields track US peers higher after resilient labour data
TOKYO: Japanese government bond yields rose on Monday, buoyed by an advance for US Treasury yields after resilient labour market data on Friday saw traders pare back bets for a near-term Federal Reserve interest rate cut. The 10-year JGB yield rose 1.5 basis points (bps) to 1.470% as of 0515 GMT. The two-year JGB yield also added 1.5 bps to 0.775%, while the five-year yield climbed 2 bps to 1.030%. That's after 10-year Treasury yields jumped 11.5 bps on Friday as a rise in non-farm payrolls for May and gains for wages topped economist estimates. Traders now see 63% odds of a Fed cut by September, down from 74% before the jobs data. Benchmark 10-year JGB futures fell 0.18 yen to 139.17 yen. Yields rise when bond prices fall. The 20-year JGB yield added 2.5 bps to 2.355%, and 30-year yield advanced 3.5 bps to 2.910%. For those super-long bonds, yields remained a long way from last month's peaks: a quarter-century high of 2.600% for 20-year JGBs and a record 3.185% for 30-year JGBs. Investors shied away from the longest-dated securities amid growing angst about developed-nation deficits, including in Japan, which were later exacerbated by poor results at super-long JGB auctions. However, a turning point for the market came when Japan's finance ministry pledged to examine reduced issuance of super-long debt, according to Yunosuke Ikeda, chief macro strategist at Nomura. Japan 30-year bond auction bid-to-cover ratio 2.92, lowest since December 2023 Now, in the event of a poor JGB auction, investors still buy the bonds in the belief that the finance ministry will pare issuance by even more. 'A kind of built-in stabilization system is at work,' Ikeda said. 'In that sense, we can say the worst period is over.'
Free Malaysia Today
29-05-2025
- Business
- Free Malaysia Today
Dollar rallies after Trump's tariffs face court roadblock
The US dollar rose 0.64% against the yen at 145.77 after touching a two-week high of 146.2 earlier in the session. (Freepik pic) SINGAPORE : The US dollar strengthened against major peers today after a court blocked President Donald Trump from imposing his import tariffs on other countries, providing some relief for the currency that has struggled this year due to trade uncertainty. The greenback was trading off session highs after an initial knee-jerk spike following a trade court ruling that found Trump overstepped his authority by imposing across-the-board duties on imports from US trading partners. In response, the Trump administration filed an appeal within minutes. 'It's almost impossible to know if the tariffs will be completely unwound by this. 'However, in the hypothetical situation that they are, it's natural to see dollar appreciation,' said Yunosuke Ikeda, head of macro research at Nomura in Tokyo. 'Trump's tariffs will lead to stagflation pressure on the US economy, so reversing those tariffs would be a positive for the dollar,' Ikeda said. US assets including the dollar, equities and longer-dated Treasury bonds have witnessed sharp declines in recent months as investors reassessed historic assumptions around the strength and outperformance of US markets as Trump's erratic trade and tax policies sap confidence and spur inflation. Today, the dollar reversed some of those moves and rose 0.64% against the yen at 145.77 after touching a two-week high of 146.2 earlier in the session. It was last 0.67% higher against the Swiss franc at 0.83245. The euro slipped 0.4% to US$1.12445 and sterling slightly weaker at US$1.344. That left the dollar index, which measures the US currency against six major peers, back above 100 for the first time in a week. 'There's an initial reaction of a stronger dollar and weaker yen. However, considering judicial processes like appeals, I don't expect a continuous rise in the dollar,' said Hirofumi Suzuki, chief FX strategist at SMBC. Despite today's spike, the index is down 8% this year and analysts said that the new court ruling did little to offer clarity on the outlook for tariffs and they were sceptical of a sustained dollar rally in the face of a long court battle. Treasuries were also sold off, with yield on the 10-year note up 2.6 basis points at 4.503%. The greenback has weakened about 2% against the Japanese yen, nearly 6% against the Swiss franc and 4% against the euro since Trump slapped harsh levies on global economies on April 2, while the broader dollar index has fallen more than 3%. 'The markets are buying back the dollar on the news, rather than selling the yen,' said Tohru Sasaki, chief strategist at Fukuoka Financial Group. 'But if the dollar continued to rise to above 148 yen, speculative short yen positions may be forced to unwind, causing the dollar-yen pair to rise even more,' he said. US stock futures and Asian bourses jumped on a risk-on rally. Traders also cut their expectations for interest rate cuts by the Federal Reserve to 42 basis points of easing compared to 50 basis points earlier in the week, LSEG data showed. Investor focus this month has been on the bond market, with lacklustre demand for longer-dated debt globally drawing attention to worsening government deficits, while also monitoring any developments on Trump's US tax and spending bill. Moody's this month lowered its US credit rating, citing the worsening fiscal outlook for the world's biggest economy. However, investor sentiment slightly improved this week after Trump delayed on the weekend a plan to impose 50% tariffs on EU imports and investors are on the lookout for any signs of improving relations between the US and its trade partners.
Zawya
29-05-2025
- Business
- Zawya
Dollar surges after US court blocks Trump's tariffs
SINGAPORE - The U.S. dollar rallied on Thursday in knee-jerk reaction to a court blocking President Donald Trump from imposing his import tariffs on other countries, providing some relief for the currency that has struggled this year due to trade uncertainty. The Manhattan-based Court of International Trade said the U.S. Constitution gives Congress exclusive authority to regulate commerce with other countries that is not overridden by the president's emergency powers to safeguard the U.S. economy. In response, the Trump administration filed an appeal within minutes. "It's almost impossible to know if the tariffs will be completely unwound by this. But in the hypothetical situation that they are, it's natural to see dollar appreciation," said Yunosuke Ikeda, head of macro research at Nomura in Tokyo. "Trump's tariffs will lead to stagflation pressure on the U.S. economy, so reversing those tariffs would be a positive for the dollar." U.S. assets including the dollar, equities and longer-dated Treasury bonds have witnessed sharp declines in recent months as investors reassessed historic assumptions around the strength and outperformance of U.S. markets as Trump's erratic trade and tax policies sap confidence and spur inflation. On Thursday, the dollar reversed some of those moves and rose 0.72% against the yen to 145.86 and 0.63% against the Swiss franc to 0.8326. The euro slid 0.42% to $1.1245 and sterling fell 0.30% to $1.3432. That left the dollar index , which measures the U.S. currency against six major peers, back above 100 for the first time in a week. The index, though, is down 8% this year and analysts remain sceptical of a sustained dollar rally and expect a long court battle over tariffs. "There's an initial reaction of a stronger dollar and weaker yen. However, considering judicial processes like appeals, I don't expect a continuous rise in the dollar," said Hirofumi Suzuki, chief FX strategist at SMBC. The greenback has weakened about 2% against the Japanese yen, nearly 6% against the Swiss franc and 4% against the euro since Trump slapped harsh levies on global economies on April 2, while the broader dollar index has fallen more than 3%. "The markets are buying back the dollar on the news, rather than selling the yen," said Tohru Sasaki, chief strategist at Fukuoka Financial Group. "But if the dollar continued to rise to above 148 yen, speculative short yen positions may be forced to unwind, causing the dollar-yen pair to rise even more," he said. U.S. stock futures and Asian bourses jumped on a risk-on rally. Traders also cut their expectations for interest rate cuts by the Federal Reserve to 42 basis points of easing compared to 50 basis points earlier in the week, LSEG data showed. Investor focus this month has been on the bond market, with lacklustre demand for longer-dated debt globally drawing attention to worsening government deficits. Traders are also watching progress of a budget and spending bill in the U.S. Congress that is expected to add trillions of dollars of debt. But sentiment about the U.S. economy has improved after Trump delayed on the weekend a plan to impose 50% tariffs on European Union imports and investors are on the lookout for any signs of improving relations between the United States and its trade partners. (Reporting by Rae Wee, Stella Qiu, Johann M Cherian and Ankur Banerjee; Editing by Christopher Cushing and Jamie Freed)
