Global sovereign bond yields retreated from multi-decade peaks on Thursday after the U.S. Department of the Treasury doubled its long-end buyback capacity to $4 billion per session, easing pressure on longer-duration debt.
The benchmark 10-year U.S. Treasury yield, which had briefly tumbled to 4.647% overnight, climbed back to 4.688%, paring losses from a 19-year high of 5.337% set on Tuesday. The 30-year yield rose to 5.23%, while the two-year yield edged up to 4.185%. U.S. gross national debt surpassed $40 trillion for the first time, underscoring the scale of fiscal pressures.
In Asia, Japan’s 10-year government bond yield fell 5.4 basis points to 2.842%, its largest single-day decline since July 14, after touching a 30-year high of 2.945% earlier in the week. The retreat reflected a partial unwinding of recent gains, though local headwinds persisted, including expectations of a potential Bank of Japan rate hike as early as September, fiscal uncertainty tied to consumption tax proposals, and a widening trade deficit driven by elevated crude imports.
European yields also eased, with Germany’s 10-year Bund yield slipping to 3.251% after four consecutive sessions of losses, pulling back from a 15-year high of 3.272%. France’s 10-year OAT yield declined for the first time in five days to 4.102%, retracing levels last seen in November 2008. Germany’s two-year Schatz yield, however, extended its five-session winning streak to 2.53%, marking its longest stretch of gains since August 2025.
The European Central Bank’s policy outlook remained a key focus, with eurozone inflation holding near 3%, prompting traders to price in a high probability of a 25-basis-point rate hike at next month’s meeting. France also reopened auctions across multiple debt maturities, including 2-year, 5-year, 6-year, 8-year, 17-year, and 21-year lines.
Energy markets showed little change, with Brent crude holding above $91 a barrel amid ongoing disruptions in the Strait of Hormuz, where commercial shipping traffic remained depressed at single-digit levels, according to Kpler data.
Global traders are now focusing on Federal Reserve Chair Kevin Warsh’s upcoming address at the Jackson Hole Symposium for further signals on monetary policy direction.
