Treasury Yields Break 5% for First Time Since 2007
The 10-year US Treasury yield climbed above 5% on Friday, 11 September 2026, touching its highest level in 19 years, according to market data. The move extends a selloff that began earlier this week after stronger-than-expected US economic data and hawkish comments from Federal Reserve officials.
The 30-year yield also rose, approaching 5.2%, while the 2-year note hovered near 4.8%. The yield curve remains inverted, but the gap has narrowed as long-dated bonds bear the brunt of the selling.
Washington’s Treasury buy-back programme, announced in August 2026, has so far failed to cap the rise. The programme aims to improve liquidity in off-the-run securities, but analysts say it is too small to offset the broader supply-demand imbalance. The US deficit remains above 6% of GDP, forcing the Treasury to issue record amounts of debt.
Yen Strengthens as Carry Trades Unwind
The Japanese yen surged to 138 per dollar on Thursday, 10 September 2026, its strongest level in 14 months. The move marks a sharp reversal from July, when the yen hit 162, a 38-year low.
The rally is driven by two forces. First, the Bank of Japan raised its policy rate to 0.5% in July 2026 and signalled further hikes if inflation stays above 2%. Second, falling US rate-cut expectations have narrowed the yield gap that had fuelled yen-funded carry trades.
Hedge funds and retail investors had borrowed yen to buy higher-yielding assets, including US tech stocks and emerging market bonds. As the yen appreciates, those positions become unprofitable, forcing a scramble to cover. This dynamic amplified the yen’s move and contributed to volatility in global equity markets.
Chinese Brokerages Post 50% Revenue Jump on Stock Rally
Chinese brokerages reported a more than 50% increase in core revenue for the first half of 2026, according to industry data released this week. The surge was driven by a buoyant domestic stock market, with the Shanghai Composite up 18% year-to-date through 10 September 2026.
Retail trading volumes hit record highs in March and April 2026, boosting commission income. Investment banking fees also rose as initial public offerings resumed after a two-year slowdown. The rally has been supported by government stimulus measures and expectations of further easing.
Hong Kong saw continued growth in retirement assets, with total assets under management in the city’s pension system reaching a record HK$1.2 trillion in August 2026. The inflow reflects both market gains and increased contributions.
What to Watch: 5.25% on the 10-Year and the 140 Yen Level
The next test for global markets is whether the 10-year Treasury yield pushes above 5.25%, a level last seen in 2006. A break higher could trigger another leg of the bond selloff and further yen strength.
For the yen, the 140 per dollar level is key. A sustained move below that threshold would likely force more carry trade unwinds, pressuring risk assets. Conversely, if US data softens and the Fed signals cuts, yields could retreat and the yen could stabilise.
Investors should also watch the Bank of Japan’s next policy meeting on 22 September 2026. Any hint of a faster rate hike path would accelerate the yen’s rise. Meanwhile, the US Treasury’s next quarterly refunding announcement on 4 November 2026 will reveal whether buy-backs are expanded, which could ease long-end pressure.
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