The yield on Japan’s 10-year government bonds (JGB) has reached its highest level since September 2013. This increase comes as global bond yields surge amidst concerns over inflation and expectations of economic recovery. The rising yield reflects growing optimism among investors and a shift away from safe-haven assets, such as bonds, towards riskier investments.
Japan’s Nikkei stock index has touched a 1-month low due to weakness in Wall Street. The decline in the Nikkei is attributed to concerns over rising bond yields and their impact on stock markets worldwide. The drop in Wall Street, combined with increasing inflation fears, has led to cautious trading in Japan and other Asian markets.
In a positive turn, the Nikkei managed to recoup its losses and close higher, driven by dividend hunting. Investors turned their attention to dividend-paying stocks, seeking stable returns amidst the market uncertainties. This rebound suggests that investors are willing to take on some level of risk by allocating their funds towards companies with solid dividend policies. However, the overall market sentiment remains cautious, with future movements likely to be influenced by factors such as global bond yields and inflation expectations.