US Treasury yields scaled fresh multi-year peaks Thursday and held near those levels in Asia trade, defying a softer-than-expected August inflation reading and a downward revision to July.
The August CPI surprise initially trimmed bets on a Fed rate hike this month. But the bond market's unease reflected deeper concerns: persistent duration risk as yields continued their ascent.
The real pressure came from abroad. The Bank of Japan's quarterly Tankan survey showed Japanese business confidence at an eight-year high for July-September, with elevated inflation expectations embedded in the data. At its September meeting, the BOJ raised rates to a 31-year high, and meeting minutes revealed some policymakers saw a case for accelerating the pace of tightening, signaling a hawkish bias that caught global bond markets flat-footed.
Euro zone inflation also ran hotter than expected in several major economies last month, adding to the global tightening narrative. Stalled US-Iran peace talks, now spanning seven months, have done little to ease global oil and commodity pressures.
In equities, AI chipmaker Micron Technology reported quarterly revenue forecasts above analyst estimates and said customers increased long-term supply commitments to $32 billion—a signal of sustained AI memory demand. But the news failed to lift sentiment in thinned Asia trading, with Hong Kong and China markets closed for a holiday.
