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)