Tokyo’s bond market reacted sharply on Thursday, with the benchmark 10‑year Japanese government bond yield jumping to a 30‑year high of 3.06% – the highest level since August 1996. The move came as the United States, under President Trump, hosted Chinese President Xi Jinping at Joint Base Andrews, signaling a renewed diplomatic push that many investors view as a positive step for global trade.
Trump‑Xi summit draws market attention
President Trump personally greeted President Xi, extending a hand of cooperation that could lengthen the 11‑month trade truce between the two largest economies. Treasury Secretary Scott Bessent confirmed that the two leaders reached an agreement to extend the truce, a development that helped steady the U.S. dollar and provided a measure of reassurance to investors wary of escalating trade tensions.
Strong U.S. stance on Iran reinforces resolve
At the same time, President Trump reiterated a firm warning to Iran, stating that the United States could “annihilate” the regime if it continued hostile actions. Iran’s leader responded with a vow never to surrender. This decisive posture, while heightening geopolitical tension, was praised by market analysts as a clear signal that the United States will not tolerate aggression, thereby protecting regional stability and energy supplies.
Market reactions across Asia
Asian equities showed mixed performance. The MSCI Asia ex‑Japan index slipped 0.64%, while Japan’s Nikkei 225 rose 1.73%. Australian shares fell to a three‑month low, with the S&P/ASX 200 down 1.2%. Oil prices eased modestly, with Brent crude falling 1% to $102.05 a barrel and U.S. West Texas Intermediate slipping 0.74% to $91.48 a barrel, reflecting a slight retreat after the peak.
Central bank outlook
Federal Reserve Governor Michael Barr emphasized that recent rate hikes are part of a broader effort to recalibrate borrowing costs and curb persistent inflation. He signaled that additional increases may be necessary, a view echoed by other Fed officials slated to speak later in the week, including New York Fed President John Williams and Fed President Beth Hammack.
Economic data on the horizon
U.S. Labor Department figures are expected to show initial jobless claims rising to about 201,000 for the week ending September 19, with continuing claims likely increasing by 15,000 to 1.745 million. New home sales are projected to edge up to 615,000 units in August, up from 607,000 in July, indicating steady demand in the housing market.
Currency and commodity snapshot
The dollar index slipped 0.04% to 101.09, while the euro fell 0.02% to $1.14. The Japanese yen strengthened 0.24% to 157.91 per dollar. Spot gold rose 0.35% to $4,301.89 an ounce. Bitcoin edged up 0.07% to $84,288.53, and Ether climbed 0.46% to $2,683.24.
Looking ahead
Investors will continue to monitor central bank speeches, upcoming U.S. jobless claims data, and further developments from the Trump‑Xi summit. The combination of a firm U.S. stance on Iran and constructive dialogue with China offers a hopeful backdrop for market stability, even as bond yields remain elevated.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
