# Marketmind: Reality check Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-10-19 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Asian markets jittery as U.S. bond yields surge Meta Description: Stay up to date on the latest developments in Asian markets as U.S. bond yields surge, impacting currencies and central bank interventions. URL: https://financedigest.com/marketmind-reality-checkhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-10-19t201011z1lynxmpei9i0ucrtroptp4global-markets-1736814993825-compressed.jpg) By Jamie McGeever (Reuters) – A look at the day ahead in Asian markets from Jamie McGeever If investors needed a reminder that the road to recovery in risk assets will be marked by setbacks along the way, they got it on Wednesday as U.S. [bond yields surged](https://www.financedigest.com/analysis-banks-lag-bond-yield-surge-as-recession-worries-trump-cheap-valuations.html "Analysis-Banks lag bond yield surge as recession worries trump cheap valuations") to new cycle highs. Not only are Treasury yields across the curve the highest in years, the rapid pace of increase makes sporadic spillovers into other regions and [markets almost](https://www.financedigest.com/sulphur-recovery-technology-market-value-to-grow-by-almost-1-2-billion-during-2021-2031.html "Sulphur Recovery Technology Market Value to Grow by Almost .2 Billion During 2021-2031") inevitable. Punchy UK and Canadian inflation, and growing speculation that the [Bank of Japan might soon sell](https://www.financedigest.com/russia-bans-western-investors-from-selling-banking-key-energy-stakes.html "Russia bans Western investors from selling banking, key energy stakes") Treasuries for yen-supporting FX intervention, helped drive the surge in yields that eclipsed solid U.S. earnings and flattened the nascent equity bounce. At its current level, the 10-year [Treasury yield](https://www.financedigest.com/stocks-jump-as-treasury-yields-ease-and-oil-prices-sell-off.html "Stocks jump as Treasury yields ease and oil prices sell off") is up around 260 bps this year. Remarkably, that would be its [biggest annual rise since](https://www.financedigest.com/uk-firms-plan-biggest-pay-rises-since-2012-to-fill-staff-gaps.html "UK firms plan biggest pay rises since 2012 to fill staff gaps") at least the 1950s. The two-year yield’s year-to-date [rise of 380 bps is on track for its biggest increase since](https://www.financedigest.com/uk-credit-card-borrowing-rises-by-most-since-2005-boe.html "UK credit card borrowing rises by most since 2005 – BoE") at least the mid-1970s, even outstripping the 345 bps burst in 1994. This has a powerful effect on Asia – it tightens financial conditions, pushes down exchange [rates and makes currency-supportive intervention from central banks](https://www.financedigest.com/bank-of-englands-mann-doubles-down-on-backing-for-rate-hikes.html "Bank of England’s Mann doubles down on backing for rate hikes") more likely. With the yen at a fresh 32-year [low near 150 per dollar](https://www.financedigest.com/dollar-falls-to-nine-month-low-as-powell-notes-progress-in-disinflation.html "Dollar falls to nine-month low as Powell notes progress in disinflation"), all eyes are on the BOJ. It sold around $20 bln to prop up the yen last month, and further action could [put added downward pressure on Treasuries prices](https://www.financedigest.com/reuters-impact-please-put-a-price-on-carbon-says-europes-biggest-utility.html "REUTERS IMPACT-‘Please put a price on carbon’, says Europe’s biggest utility"). [China’s monetary and FX policies](https://www.financedigest.com/analysis-trapped-cash-mangles-chinas-policy-plans.html "Analysis-Trapped cash mangles China’s policy plans") are also in the spotlight. The People’s [Bank of China is expected to keep benchmark lending rates unchanged for a second straight month on Thursday – maybe some relief for the battered property sector](https://www.financedigest.com/sterling-rises-as-receding-bank-sector-worries-lift-sentiment.html "Sterling rises as receding bank sector worries lift sentiment"), but not for the currency. The offshore yuan is at a record low against the [dollar](https://www.financedigest.com/dollar-slips-yuan-gains-on-china-pmi-hot-inflation-lifts-euro.html "Dollar slips, yuan gains on China PMI; hot inflation lifts euro") and the onshore yuan is at its lowest since 2008. [Key developments that could provide more direction to markets](https://www.financedigest.com/golf-apparel-market-key-players-and-production-information-analysis-with-forecast-2031.html "Golf Apparel Market: Key Players and Production Information Analysis with Forecast 2031") on Thursday: China [interest rate](https://www.financedigest.com/ecb-raises-interest-rates-again-cuts-bank-subsidies.html "ECB raises interest rates again, cuts bank subsidies") decision (Reuters survey: on hold) Indonesia [interest rate](https://www.financedigest.com/interest-rate-and-recession-fears-knock-stocks-and-oil.html "Interest rate and recession fears knock stocks and oil") decision (Reuters survey: hike) Japan trade (September) Australia unemployment (September) (Reporting by Jamie McGeever in Orlando, Fla.; Editing by Josie Kao) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---