What’s going on here?
Japanese government bond (JGB) yields fell on Wednesday following a drop in US Treasury yields, spurred by weak US manufacturing data.
What does this mean?
The benchmark 10-year JGB yield dipped by 3.5 basis points to 0.885%, reversing the gains seen in the prior days, as 10-year JGB futures climbed by 0.38 yen to 144.79 yen. This move trails the US Treasury market, where the 10-year yield dropped to 3.83% during Asian trading hours on Wednesday. This followed the ISM’s report showing a rise to 47.2 in August from July’s eight-month low of 46.8, yet still indicating a contraction in the US manufacturing sector for the fifth consecutive month. Given the global market’s sensitivity to US economic indicators, last month’s weak jobs report raised recession fears, putting further emphasis on the upcoming non-farm payrolls release for August.
Why should I care?
For markets: Ripples across the yield curve.
All eyes…
