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GLOBAL MARKETS-Long bond yields rise, gold hits record on fiscal concerns
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GLOBAL MARKETS-Long bond yields rise, gold hits record on fiscal concerns
Sep 2, 2025 7:47 PM

TOKYO, Sept 3 (Reuters) - A global slide in long-dated

bonds extended into Asia on Wednesday, while gold climbed to a

new peak as concerns mounted over government debt and economic

growth.

The 30-year Japanese government bond (JGB) yield hit an

unprecedented 3.255%, following a run-up in similarly dated

gilts and Treasuries overnight. Japan's Nikkei gauge of shares

opened lower, following declines on Wall Street after data

showed a continued contraction in U.S. manufacturing.

Attention turns to services data in Europe for indications

of how countries are weathering the unpredictable tariff regime

from U.S. President Donald Trump and to key U.S. labour data on

Friday for signals on rate cuts by the Federal Reserve.

"This rise in bond yields is sort of weighing on your tech

sector in the U.S.," Skye Masters, head of markets research at

National Australia Bank, said in a podcast. "It is all about

concerns about government budget deficit positions and the

implications for bond issuance."

Trump on Tuesday said his administration will ask the

Supreme Court for an expedited ruling on tariffs that an appeals

court found illegal last week. The court allowed for the tariffs

to stay in place until October 14.

U.S. manufacturing contracted for a sixth straight month in

August as factories grappled with the impact of import tariffs,

data showed on Tuesday. Purchasing managers indexes for the euro

zone and Britain are due for release on Wednesday.

U.S. nonfarm payrolls on Friday will be preceded by data on

job openings and private payrolls, giving clarity on the labour

market that has become the focus of policy debate at the Fed.

Markets widely expect the Fed to lower interest rates later

this month, pricing in an 89% chance of a 25-basis-point cut.

Bond yields move inversely to prices, and yields especially

on super-long-dated 30-year bonds have been soaring around the

world, with investors concerned about the scale of debt in

countries from Japan to the United States.

The 30-year JGB yield jumped 8 basis points

(bps) to a record high of 3.28% as markets brace for a sale of

the debt on Thursday.

The yield on the benchmark U.S. 10-year Treasury note

rose 0.4 basis points to 4.281%. The yield on the

30-year Treasury rose 0.7 basis points to 4.978%,

nearing the highest since mid-July.

MSCI's broadest index of Asia-Pacific shares outside Japan

was up 0.1%, while Japan's Nikkei slid

0.5%.

Australia's S&P/ASX 200 index sank 0.9% after

second-quarter gross domestic product data.

The dollar continued its winning ways, rising 0.3% to 148.79

yen. The dollar index, which tracks the greenback

against a basket of currencies, was flat at 98.431 after a 0.7%

surge on Tuesday.

Sterling traded at $1.33716, down 0.2% so far on

the day. The pound slumped 1.1% in the previous session and

30-year gilt yields hit their highest since 1998

after the British government sold 10-year debt at the highest

yield in 17 years.

In Europe, French Prime Minister Francois Bayrou looks set

to lose a confidence vote as opposition parties balk at his cuts

to government spending, while British finance minister Rachel

Reeves is expected to raise taxes in her autumn budget to remain

in line with her fiscal targets.

U.S. crude ticked up 0.2% to $65.69 a barrel. Spot

gold reached $3,546.99, a new all-time high.

Futures pointed to strong opens in Europe, with the

pan-region Euro Stoxx 50 futures up 0.6%, German DAX

futures rising 0.5% and FTSE futures gaining

0.3%.

U.S. stock futures, the S&P 500 e-minis, were up 0.1%

at 6,430.5.

(Rocky Swift in Tokyo; Editing by Jacqueline Wong)

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