Japan's 10-year government bond yield rose above 3% on Tuesday, reaching a nearly 30-year high, as US Treasury Secretary Scott Bessent warned of risks from the unwinding of yen carry trades.
Japan's 10-year government bond yield rose above 3% on Tuesday for the first time since September 1996. This move, coupled with the continued weakening of the Japanese Yen and rising expectations of a Bank of Japan (BOJ) rate hike, has sparked concerns about a large-scale unwinding of "Yen carry trades." U.S. Treasury Secretary Scott Bessent has publicly warned that disorderly fluctuations in the Yen market could trigger forced liquidations and impact global markets. Currently, the market has fully priced in a 25 basis point rate hike by the BOJ in September, with some even betting on another hike in October.
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