US 30-Year Treasury Yield Hits 5.3230%, Limited Impact on Asian Markets

The yield on the US 30-year Treasury bond has risen to 5.3230%, marking the highest level since 2007. Mitsubishi UFJ Financial Group analyzed that the rise in US Treasury yields reflects expectations of improvement in the US and global economies rather than concerns over tightening by the Federal Reserve. The report explained that, unlike during the Russia-Ukraine war in 2022, the current rise in yields includes improved growth expectations, making it difficult to view it merely as a monetary policy shock. The impact on Asian assets is expected to be relatively small, with some Asian currencies showing strength against US Treasury yields. Factors supporting risk appetite in Asia include rising industrial metal prices and new manufacturing orders from the Bank of Korea. In the foreign exchange market, the growth momentum in Asia and improved risk appetite are likely to support a moderate strengthening of Asian currencies against the dollar. A positive outlook is maintained for the Korean won and the onshore yuan, while the Taiwanese dollar is expected to be supported by a decrease in dividend outflows and a resumption of foreign capital inflows.

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