Last Updated: 5 hours ago U.S. Treasury Yields Spike After Hawkish Comments From Bank of Japan CONCLUDED Stock Market Today: Stocks Close Lower, Kicking Off December in the Red By Martin Baccardax U.S. Treasury yields spiked on Monday, taking 10-year notes to their highest levels in nearly two weeks, following an overnight bond market selloff linked to hawkish comments on interest rates from the Bank of Japan. BoJ Governor Kazuo Ueda said Monday that he and his colleagues would weigh the "pros and cons of r ...

Core Insights - The article discusses the internal divisions within the Japanese government regarding exchange rate policies, highlighting a preference for a weaker Yen by the PM office to boost exports, while the Ministry of Finance prioritizes exchange rate stability [1][4] - The "Takaichi trade" may face challenges due to the coalition government's constraints, potentially leading to a smaller fiscal stimulus package than expected, which could result in a rapid pullback of the USD/JPY exchange rate [2][3] - The rapid depreciation of the Yen has raised concerns among officials, prompting verbal interventions to warn against excessive volatility [4][6] Government and Monetary Policy - The ruling Liberal Democratic Party (LDP) has formed a coalition with Ishin, which may limit aggressive reflationary policies and lead to a more balanced economic approach [3] - The Bank of Japan is experiencing internal debates regarding monetary policy, with a hawkish faction advocating for interest rate hikes, while a cautious faction emphasizes the need for data-driven decisions [7][8][9][10][11] - The upcoming Bank of Japan monetary policy meeting is critical, as signals from Governor Kazuo Ueda could influence market expectations and the direction of the Yen [18] Market Reactions and Expectations - The market reacted strongly to the government's fiscal expansion expectations, leading to a weaker Yen and increased pressure on Japanese government bonds [5][13] - The U.S. economic resilience, indicated by lower initial jobless claims, supports the Federal Reserve's cautious approach to interest rate decisions, maintaining a significant interest rate gap with Japan [14][15][17] - The ongoing U.S. government shutdown complicates the Federal Reserve's policy decisions, creating a paradox where the lack of data may prevent immediate easing, thus supporting the USD/JPY exchange rate [16][17]

29 May 2025 Emerging bond dynamic and regime change Toronto The tariff threat to the tariff retreat has now been reduced to a two-day cycle. Donald Trump threatened Europe with a higher 50% tariff last Friday and then on Sunday extended the deadline for Europe to come to an agreement from 1 June to 9 July. This latest twist and turn will have further convinced investors of what many were already assuming, based on GREED & fear's meetings with investors in North America this week. That is, that the 47th Pres ...