Bonds and Bitcoin Stabilize as Global Stocks Mark Modest Gains
Singapore – Global financial markets saw modest improvement on Tuesday as major stock indexes, cryptocurrencies and government bonds steadied following the previous session’s volatility driven by expectations of an interest rate hike in Japan.
Equity futures in the United States showed slight recovery, with S&P 500 futures edging up after a weak close on Wall Street the day before, while major European and Asia-ex-Japan indexes posted small but positive gains across the trading day.
A more composed atmosphere in the Japanese government bond market contributed to the broader sense of stability, after a strong auction provided reassurance to investors monitoring yields that had reached multi-year highs in recent weeks.
Japanese 10-year and 30-year yields eased slightly, helping soothe nerves after a prolonged sell-off driven by concerns over fiscal pressures and potential tightening by the Bank of Japan, which had earlier pushed yields to their highest levels in decades.
The earlier bond decline in Japan had extended pressure to major government debt markets worldwide, including the United States and Germany, where yields had jumped sharply on Monday and weighed on risk appetite across asset classes.
By Tuesday, however, global bonds appeared to be taking direction from calmer Japanese trading, with U.S. 10-year Treasury yields holding near 4.11% and German 10-year Bund yields steady at around 2.77% in broadly subdued movement.
Bitcoin also regained some footing after a severe slide on Monday, though the digital asset remains strongly lower from its recent highs, reflecting persistent caution among traders in the cryptocurrency sector.
At around $87,000, bitcoin is down about 30% from its October peak, prompting analysts to frame the recent retreat as part of a broader adjustment following weeks of volatility and shifting sentiment in digital asset markets.
Market watchers noted that bitcoin’s movements, while sharp, have not significantly spilled into broader financial markets, though investors in the crypto space described sentiment as increasingly anxious and highly reactive.
Some digital asset specialists said the latest decline had caught many market participants off guard, and suggested that the coming months may prove especially important in determining whether the sector regains its earlier momentum or continues a period of consolidation.
In currency markets, the Japanese yen softened slightly on Tuesday as both the U.S. dollar and the euro saw mild gains against the currency, though the moves followed a stronger performance for the yen earlier in the week.
Market participants appeared somewhat less concerned about possible intervention from Japanese authorities than in recent days, with trading direction influenced more by expectations regarding policy moves in Tokyo and abroad.
The dollar remained broadly steady, though some investors are beginning to anticipate a more sustained weakening trend as the United States prepares for additional interest rate cuts expected to come faster than in several other major economies.
Recent economic data reinforced expectations of a rate cut by the Federal Reserve in December, with manufacturing activity contracting for the ninth month in a row even as consumer spending surged at the start of the holiday season.
Gold prices eased modestly but remain close to recent all-time highs, supported by firm demand during periods of economic uncertainty and shifting expectations for monetary policy across major markets.
Other precious metals also edged lower, while oil prices retreated slightly after recent geopolitical tensions had lifted energy markets, with Brent crude hovering just under $63 a barrel and U.S. crude trading near $59.
Global investors continue to assess a complex mix of factors including central bank policy trajectories, energy-market risks, macroeconomic data and seasonal trading patterns as the year approaches its final weeks.
