FX.co ★ Treasury Yield Holds Advance

On Tuesday, the yield on the US 10-year Treasury note remained stable at 4.09%, following a surge to its highest point in roughly two weeks during the previous session. This volatility in the US bond market on Monday was largely spurred by a suggestion from the Governor of the Bank of Japan regarding a possible interest rate hike. Such an increase could lead Japanese investors to prioritize local bonds over higher-yielding international assets, such as US Treasuries. Adding to the pressure in the bond market was a spate of new corporate bond issues, notably from Merck & Co. Investors are now keenly anticipating remarks from Federal Reserve Chair Jerome Powell later in the day, seeking further insights into the central bank's policy direction. Currently, market expectations indicate an 88% likelihood of a 25 basis point reduction at the Fed's meeting next week.