Treasury Gains Extend, Lift Asian Stocks and Bonds: Markets Wrap

(Bloomberg) — Treasuries extended gains fueled by US plans to buy back longer-maturity debt, boosting sentiment and lifting Asian bonds and stocks. The dollar steadied after sliding to a three-month low.

The US 30-year yield fell one basis point to 5.18% after sliding nine basis points on Wednesday. The benchmark 10-year yield 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.

Bonds in Japan, Australia and New Zealand also rose after the US 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 buoyant sentiment saw MSCI’s Asia Pacific equities gauge rise 1.6%, snapping a two-day losing streak. US equity-index futures also gained, though European shares were set to drop for a seventh consecutive day.

Advances in Asia were led by a 5.5% jump in South Korea’s Kospi Index, with SK Hynix Inc. surging 12% on a share buyback plan. Samsung Electronics Co. rose 8.5%.

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 0.8% to about $4,480 an ounce after climbing to its highest level since early June. Bitcoin rose to above $69,300 after President Donald Trump pressed Congress to pass a key crypto bill as the White House hosted industry executives.

Bloomberg’s gauge of the dollar edged up 0.1% in Asian trading, 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 0.4% to about $92 a barrel. That was 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. Some of the main moves in markets:

Stocks

S&P 500 futures were little changed as of 6:50 a.m. London time Nasdaq 100 futures rose 0.3% The MSCI Asia Pacific Index rose 1.6% The MSCI Emerging Markets Index rose 2% Japan’s Topix rose 1% Australia’s S&P/ASX 200 rose 0.2% Hong Kong’s Hang Seng rose 1.2% The Shanghai Composite rose 0.2% Euro Stoxx 50 futures fell 0.2% Currencies

The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1672 The Japanese yen fell 0.3% to 158.69 per dollar The offshore yuan was little changed at 6.7250 per dollar The British pound was little changed at $1.3603 Cryptocurrencies

Bitcoin rose 0.5% to $69,356.6 Ether rose 1.2% to $2,244.46 Bonds

The yield on 10-year Treasuries was little changed at 4.64% Japan’s 10-year yield declined six basis points to 2.835% Australia’s 10-year yield declined five basis points to 5.00% Commodities

Spot gold fell 0.8% to $4,480.83 an ounce West Texas Intermediate crude rose 0.2% to $86 a barrel This story was produced with the assistance of Bloomberg Automation.

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

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