Bond Yields Soar to 2008 Crisis Levels Amid Global Market Volatility

Global long-term bond yields have reached their highest level since the 2008 financial crisis as major sovereign bonds continued to sell off on Tuesday. The US Treasury Secretary, Scott Bessent, announced that the maximum size of debt buyback transactions would be increased to $4 billion from September, which has been compared to a form of yield curve control by some commentators.

The Japan 10-year government bond yield surged to 3% for the first time since 1996 on Tuesday, while the 30-year JGB yield topped a record 4.18%. The 10-year US bond yield also surged to a new multi-year high and stands at 4.78%.

Industry commentator Arthur Hayes has argued that the Fed will eventually use its Foreign and International Monetary Authorities (FIMA) repo facility, which would create new dollar liquidity. This could strengthen the Japanese yen without causing an imminent sovereign bond crisis.