US ten-year bond yield at 5.3 percent – Nikkei rises despite high interest rate concerns
Quick Look
- The yield on ten-year US Treasury bonds rose to 5.3 percent, the highest level in 24 years.
- Despite these high capital costs, the Nikkei index in Tokyo gained 2.4 percent, driven by strong quarterly figures from the chip company Micron.
- The stock exchanges in South Korea showed little change, while Shanghai remained closed for a holiday.
AI-generated summary
Why It Matters
U.S. inflation rose less than expected in August, reducing the likelihood of another Federal Reserve rate hike in October. Still, long-term U.S. bond yields remain at multi-year highs, maintaining concerns about high capital costs.
The US ten-year bond yield is 5.3 percent, the highest level in 24 years. The Nikkei still gains more than two percent - driven by Micron's quarterly figures.
An electronic stock exchange board in Tokyo: The Nikkei is trading higher. Photo: AP Photo/Eugene Hoshiko
Singapore. The hope of an interest rate break in the USA has only slightly brightened the mood on the Asian stock markets. Data on Wednesday showed that US inflation rose less than expected in August.
This reduced the likelihood of another interest rate hike by the US Federal Reserve (Fed) in October. At the same time, investors held back because of bond yields that are at multi-year highs and high oil prices.
In Tokyo, the Nikkei index rose 2.4 percent, with chip stocks in particular in demand after the strong figures from the US company Micron.
The stock exchanges in South Korea, on the other hand, hardly changed.
The markets in Shanghai remained closed due to the holiday.
“The weaker US data has taken the pressure off Fed expectations and short-term yields, but concerns about the cost of capital have not really gone away as long-term yields remain high,” said Charu Chanana, investment strategist at Saxo.
More: Important US inflation measure remains at 3.4 percent
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What to Watch
AI outlook — possibilities, not facts
The Federal Reserve is expected to leave interest rates unchanged in October based on weaker August inflation data.
Likely · Within weeks
The Nikkei index could rise further in the short term if further positive quarterly figures are presented by technology companies such as Micron.
Possible · Within weeks
Open Questions
- How long will high US yield levels last?
- Will the Federal Reserve still raise interest rates despite weaker inflation data?
- How much will the technology industry, especially chip stocks, be affected by the high cost of capital in the long term?
