Asian Bonds and Stocks Rise After Treasuries Rally: Markets Wrap

(Bloomberg) — Asian bonds and stocks gained as US plans to buy back longer-dated Treasuries to curb borrowing costs buoyed sentiment. The dollar steadied after sliding to a three-month low.

Bonds in Japan, Australia and New Zealand all rose following Wednesday’s gains in Treasuries. US sovereign debt rallied after the Treasury said it would at least double the size of its bond buybacks, which would curb yields on long-term bonds that had climbed to multi-decade highs.

The US 30-year yield fell one basis point to 5.18% in Asian trade after sliding nine basis points on Wednesday. The benchmark 10-year dropped by a similar amount to 4.63%, extending its six-basis-point decline in the previous session. A Bloomberg index of Treasuries due in 20 years and above had jumped 1.7% Wednesday, its biggest one-day gain since February 2025.

MSCI’s Asia Pacific index rose 1.6%, snapping a two-day losing streak, boosted by a 5.8% advance in South Korea’s Kospi. Technology stocks rebounded as SK Hynix Inc. shares jumped more than 12% after the Korean memory-chip maker unveiled plans for a stock buyback.

Global bonds had been jolted in recent days as investors demanded greater compensation for inflation risks and rising government debt levels, while tensions in the Middle East added to price pressures. The selloff, which also weighed on stocks, was exacerbated by a wave of corporate borrowing to finance the artificial-intelligence boom.

“The buyback suggests to me that the US Treasury is highly concerned about the long-term borrowing costs,” said Gerald Gan, chief investment officer at Reed Capital. “Just like what he did for the Japanese yen, the effect will be temporary and the buybacks cannot be sustained for too long.”

In other corners of the market, gold slipped 0.4% to about $4,500 an ounce after climbing to its highest level since early June. Bitcoin rose to around $70,000 after President Donald Trump pressed Congress to pass a key crypto bill as the White House hosted industry executives.

As sentiment improved, US equity-index futures advanced in Asian trading after the S&P 500 Index posted a modest gain Tuesday, even as chipmakers declined. Contracts for the Nasdaq 100 Index rose 0.5%.

Bloomberg’s gauge of the dollar was little changed in Asia, after sliding 0.8% on Wednesday to the lowest level since May as Treasury yields declined.

“While buybacks alone are unlikely to alter longer-term fundamentals, they do signal willingness by policymakers to lean against further yield increases,” Lloyd Chan, a foreign-exchange strategist at MUFG Bank in Singapore, wrote in a note. “This suggests the relative-rate story that has supported the dollar is fading.”

What Bloomberg’s Strategists Say…

“The dollar is shaping up as the weak link for investors weighing Treasury buybacks against the US’s widening fiscal deficit. That gives Asian currencies room to run.”

-Mark Cranfield, Markets Live Strategist. For more on the analysis, click here.

Meanwhile, Brent crude advanced for a fifth day to about $92 a barrel. That came after Trump said there would be an unprecedented economic warfare operation against Iran, after faulting the country for failing to take its chance to make a deal with him.

Long-maturity government bond yields surged globally this week, with the US 30-year yield reaching its highest level since 2007. A 10-year Treasury auction last week drew the highest financing cost for that maturity since 2007, while a 30-year sale a day later cleared at the highest yield since 2001.

While the Treasury didn’t indicate how the operations would be paid for, it typically relies on issuance of bills for its fluctuating funding needs. If officials are in effect replacing longer-dated debt with short-term securities, the maneuver amounts to a version of the Federal Reserve’s “Operation Twist.”

“This administration needs a win, and maybe that comes in the form of artificially trying to keep long Treasury rates contained,” said Jack McIntyre, a portfolio manager at Brandywine Global Investment Management. “They have to try something. Sentiment around the long-end globally is about as bearish as I have seen in a very long time.”

Corporate Highlights:

Marvell Technology Inc. has agreed to give Alphabet Inc.’s Google rights to buy as much as $12.2 billion of its shares in exchange for purchasing chips. Estée Lauder Cos.’s results beat estimates and ended a run of three straight declines in annual revenue, a sign the beauty conglomerate’s turnaround efforts are gaining momentum. CK Hutchison Holdings Ltd. commenced international arbitration proceedings against Panama, seeking more than $1.5 billion in damages over the loss of its investments in two ports on the country’s strategic canal. Some of the main moves in markets:

Stocks

S&P 500 futures rose 0.2% as of 10:45 a.m. Tokyo time Nikkei 225 futures (OSE) rose 1.1% Japan’s Topix rose 1.1% Australia’s S&P/ASX 200 rose 0.2% Hong Kong’s Hang Seng rose 1.2% The Shanghai Composite rose 0.7% Euro Stoxx 50 futures fell 0.2% Currencies

The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1679 The Japanese yen fell 0.2% to 158.50 per dollar The offshore yuan rose 0.1% to 6.7223 per dollar Cryptocurrencies

Bitcoin rose 0.8% to $69,610.56 Ether rose 2.1% to $2,264.67 Bonds

The yield on 10-year Treasuries was little changed at 4.64% Japan’s 10-year yield declined 6.5 basis points to 2.830% Australia’s 10-year yield declined five basis points to 5.01% Commodities

West Texas Intermediate crude rose 0.3% to $86.07 a barrel Spot gold fell 0.5% to $4,494.75 an ounce This story was produced with the assistance of Bloomberg Automation.

–With assistance from Toby Alder, Momoka Yokoyama and Ruth Carson.

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