Rising Japanese bond yields pose dangers
Japan’s long-dated government bond yields have been moving higher, with the 40-year yield hitting an all-time high of 3.689% Thursday. The moves could spark a wave in which Japan’s investors suddenly move their capital from the U.S. back home, according to Macquarie analysts. The capital flight, in turn, could cause the yen to appreciate and unwind the carry trade, leading to a global sell-off reminiscent of that in August last year.
U.S. consumer confidence in May soared
Consumer optimism in the U.S. was much better than expected in May, data from the Conference Board’s Consumer Confidence Index showed. May’s reading came in at 98.0, far higher than the Dow Jones consensus estimate for 86.0. Much of the positive sentiment, according to board officials, came from developments in the U.S.-China trade impasse. May’s rebound followed five straight months of declines.
