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August 21, 2026 - 06:02
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(Bloomberg) — Asian bonds declined and the dollar remained under pressure after a rally in Treasuries faded, with investors betting that US efforts to contain long-term borrowing costs through buybacks may offer only a temporary reprieve.Bonds fell in Japan, Australia and New Zealand after their US peers turned lower on Thursday, giving up much of the previous day’s gains that had been triggered by the Treasury’s decision to increase buybacks. The reversal came even as Treasury Secretary Scott Bessent flagged scope for larger debt repurchases and an upcoming fiscal plan.Treasuries stabilized Friday, with the 30-year yield holding at 5.25%, after rising six basis points in the prior session. The 10-year yield was at 4.70%, roughly where it was before Bessent’s surprise move. A Bloomberg gauge of the dollar fell 0.2%, set for its third weekly loss in four weeks.Elsewhere, MSCI’s Asia Pacific equities index rose 0.5%, led by technology stocks. Samsung Electronics Co. shares climbed 2.8%, with the company expected to announce a shareholder return package Friday that may be worth as much as 110 trillion won ($79 billion), according to a person familiar with the matter.The whipsaw trading in bonds extended a volatile stretch on Wall Street as a series of Treasury decisions underscored growing concern over elevated long-term yields. Lofty government financing costs are feeding through to the broader economy and weighing on equities, after years of elevated inflation and government spending.“Bessent’s expanded Treasury buyback plan failed to convince investors it can durably contain long-term borrowing costs,” said Fabien Yip, a market analyst at IG International in Sydney. “That sits alongside lingering Middle East tension and thin catalysts in tech.”Focus now shifts to Nvidia Corp.’s earnings and the Jackson Hole symposium next week, she said.In other corners of the market, the yen was little changed after Japan’s key price gauge accelerated for a second month, keeping the Bank of Japan on track for another near-term interest rate hike as market speculation builds over a move as soon as September.The yen traded around 159 per dollar.Brent crude dropped 0.3% to $93.50 a barrel after a five-day rally. Gold rose 0.4% to about $4,535 an ounce, on track for a third weekly gain.Bitcoin surpassed $70,000 for the first time in over two months after US President Donald Trump met with crypto industry leaders.What Bloomberg Strategists Say…“Japanese long-bond yields will have an upward trajectory as the influence from Treasuries will mean more to traders than Japan’s inflation data. Moreover, investors will be more interested in next week’s Tokyo CPI reading that will give a more timely inflation update before the September BOJ meeting.”— Mark Cranfield, Markets Live Strategist. For more on the analysis, click here.Meanwhile, Bessent played down Thursday’s market moves, saying “anything that happens within a 24-hour period is noise.” He also said the expanded buyback operations “could be more than the $4 billion” size planned to start next month.Market participants are warning that a lack of predictability when it comes to the US Treasury’s debt management strategy could ultimately portend higher borrowing costs.Investors and analysts at JPMorgan Chase and Co., Jefferies LLC and PGIM Inc. say that surprises stand to increase term premium, or the extra compensation demanded in the market to offset potential risks, on US government debt.Without any meaningful change to the US fiscal trajectory, given that the US budget is set by Congress and not the Treasury, tweaks around buybacks can only have a small, transient impact on markets, DBS Bank strategists including Samuel Tse wrote.“My view is that the ‘Bessent put’ is still going to fail to keep yields down from multi-decade highs over the longer term,” said Hardika Singh at Fundstrat Global Advisors. “Making yields go down over the longer period will require the painful work of bringing down the debt.”Corporate Highlights:Anthropic PBC expects to match or beat the size of SpaceX’s record-setting initial public offering, according to people familiar with the matter. Alibaba Group Holding Ltd.’s profit plunged more than 75% after the Chinese company ratcheted up quarterly capital spending to almost $10 billion. Broadcom Inc. is in talks with a group of lenders to raise more than $60 billion in debt for an AI chip financing deal that will benefit Anthropic PBC and other companies, according to people with knowledge of the matter. Some of the main moves in markets:StocksS&P 500 futures were little changed as of 1 p.m. Tokyo time Japan’s Topix was little changed Australia’s S&P/ASX 200 fell 0.3% Hong Kong’s Hang Seng rose 0.7% The Shanghai Composite was little changed Euro Stoxx 50 futures were little changed CurrenciesThe Bloomberg Dollar Spot Index fell 0.2% The euro rose 0.1% to $1.1693 The Japanese yen was little changed at 159.01 per dollar The offshore yuan was little changed at 6.7220 per dollar CryptocurrenciesBitcoin rose 2.6% to $74,574.59 Ether rose 1.1% to $2,343.79 BondsThe yield on 10-year Treasuries was little changed at 4.71% Japan’s 10-year yield advanced 3.5 basis points to 2.880% Australia’s 10-year yield advanced five basis points to 5.06% CommoditiesWest Texas Intermediate crude fell 0.4% to $86.50 a barrel Spot gold rose 0.4% to $4,536.62 an ounce This story was produced with the assistance of Bloomberg Automation.–With assistance from Winnie Hsu and Ruth Carson.©2026 Bloomberg L.P.
