Stocks Soar Globally as US Treasury Auction Yields Hit Record High

Stocks were largely higher globally yesterday, driven by chip stocks in Asia and a breakout for the S&P 500. The Nikkei 225 in Japan reached its highest level since earlier this month, while South Korea's KOSPI climbed to levels not seen since late July.

The US Treasury auctioned off 30-year bonds at their highest rate since 2001, with yields reaching as high as 5.22%. This suggests that investors are demanding compensation for the risk of lending to the US government due to its growing deficit.

Despite easing inflation pressures following the US July PPI report, which saw headline inflation cool to 4.7% from 5.5% in June, the Federal Reserve remains divided on whether to tighten monetary policy. Cleveland Fed President Beth Hammack reiterated calls for immediate policy tightening to bring inflation back to target.

The yen is once again in focus, trading near ¥160 against the USD and flirting with intervention territory. The Bank of Japan is expected to step in at its September meeting, but investors will be watching whether it signals a faster pace of tightening.