🚨 Important
Disappointing GDP and bonds at 30-year highs
The Japanese government released today the official Gross Domestic Product (GDP) figures for the second quarter. The country grew only 1.1% annualized, far below the 2.0% economists had projected due to private consumption being completely frozen.
Despite weak economic growth, yields on Japan’s 10-year government bonds hit a three-decade high today (2.93%) due to strong domestic inflation driven by yen devaluation (which trades at 159 per dollar). This rise in yields sparked alarms of global volatility, as higher borrowing costs in Japan push major international investors to unwind leveraged positions in foreign risk assets to cover their yen-denominated debts. The Nikkei 225 closed the session up slightly, by 0.7%.
$GPS $ONG $ACE
Disappointing GDP and bonds at 30-year highs
The Japanese government released today the official Gross Domestic Product (GDP) figures for the second quarter. The country grew only 1.1% annualized, far below the 2.0% economists had projected due to private consumption being completely frozen.
Despite weak economic growth, yields on Japan’s 10-year government bonds hit a three-decade high today (2.93%) due to strong domestic inflation driven by yen devaluation (which trades at 159 per dollar). This rise in yields sparked alarms of global volatility, as higher borrowing costs in Japan push major international investors to unwind leveraged positions in foreign risk assets to cover their yen-denominated debts. The Nikkei 225 closed the session up slightly, by 0.7%.
$GPS $ONG $ACE