Global government bond yields eased from multi-decade peaks on Wednesday after the U.S. Treasury announced plans to expand buyback operations for long-dated debt, easing pressure on long-term borrowing costs.
The U.S. Department of the Treasury said it would at least double buyback volumes for 10-year to 30-year nominal securities, allocating $4 billion per session to the program. The move coincided with a sharp drop in U.S. Treasury yields, with the 10-year benchmark falling to 4.647% and the 30-year dropping to 5.198%, paring recent increases that had pushed rates toward multi-year highs.
Japanese government bond yields also retreated, with the 10-year JGB yield slipping from 2.896% to 2.842%, its largest single-day gain since mid-July. The decline followed a brief surge to a 30-year high of 2.945% earlier in the week, amid speculation over a potential Bank of Japan rate hike as soon as September, fiscal uncertainty tied to consumption tax proposals, and a widening trade deficit driven by record crude oil imports.
In Europe, benchmark German 10-year Bund yields eased to 3.251%, snapping a four-day losing streak after touching a 15-year high of 3.272% on Tuesday. The 2-year Schatz yield, more sensitive to rate expectations, rose for a fifth consecutive session to 2.53%, marking its longest winning streak since August 2025. French 10-year OAT yields fell to 4.102%, retracing from levels last seen in November 2008.
Market pricing suggests elevated expectations for further monetary tightening, with swap markets indicating a high probability of a 25-basis-point European Central Bank rate hike next month, even as eurozone inflation remains near 3%.
Energy markets added to the volatility backdrop, with Brent crude holding above $91 per barrel amid ongoing geopolitical tensions in the Strait of Hormuz, a key transit route for global oil shipments. Shipping data from Kpler indicated persistently low daily commodity vessel traffic, reflecting broader trade uncertainties.
The developments follow remarks from Federal Reserve Chair Kevin Warsh, who is scheduled to speak at the Jackson Hole Symposium later this month, where further signals on U.S. monetary policy direction are expected.
