The U.S. 10-year Treasury yield climbed to a one-year high of 4.530% as of Friday, reflecting heightened expectations for interest rate hikes by both the U.S. Federal Reserve and the Bank of Japan. This surge surpasses the critical 4.50% level previously influenced by Trump. Market sentiment is shifting as changes in Federal Reserve leadership and macroeconomic indicators suggest that rate cuts are unlikely.
In Japan, the probability of a rate hike by the Bank of Japan in June is heavily priced in, with an 80% likelihood according to Polymarket. Additionally, factors such as SpaceX's significant fundraising efforts and renewed tensions in the U.S.-Iran conflict are expected to impact market liquidity and investor confidence. These developments suggest that risk assets may face increased pressure in the short term, potentially leading to a broader market correction.
U.S. and Japan Rate Hike Expectations Push Treasury Yields to 4.530%
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