Global financial markets exhibited mixed movements as they monitored monetary policies and economic trends in major countries. While U.S. and European stock markets rebounded amid easing global bond sell-offs, Japan's stock market experienced a slight decline.
On September 3, the U.S. Standard & Poor's (S&P) 500 index rose by 1.06% to close at 7,747.7. The European Stoxx 600 index also increased by 0.49%. In contrast, Japan's Nikkei 225 index fell by 0.17%. The stabilization of global bond market volatility, coupled with reduced concerns over U.S. interest rate hikes, supported investor sentiment.
In the bond market, long-term interest rates in major countries fell across the board. The yield on the U.S. 10-year Treasury note decreased by 1 basis point to 4.77%. Germany's 10-year yield dropped by 3 basis points to 3.34%, while Japan's fell by 7 basis points to 2.96%. The recent global bond sell-off, driven by concerns over fiscal burdens and monetary tightening in major economies, appears to have subsided somewhat.
In the U.S., the likelihood of further interest rate hikes by the Federal Reserve has diminished, contributing to the easing of Treasury yields. Christopher Waller, a member of the Fed, stated on September 3, "If upcoming economic indicators confirm a trend of declining inflation, I could support maintaining the current interest rate level."
As a result, market expectations for a rate hike in September have decreased from around 60% to the low 50% range. However, the Institute for Supply Management's (ISM) services index for August reached 55.4, the highest in six months, and the price index hit a four-year high, keeping inflation concerns alive.
In Asia, Japan's monetary policy normalization has emerged as a key variable. Officials from the Bank of Japan anticipate a potential 0.25 percentage point rate hike at the upcoming monetary policy meeting in September. Some market participants are speculating that the rate increase could occur in December this year or January next year. As Japan moves away from its prolonged ultra-low interest rate policy, the impact of bond yields and the yen's movements on global capital flows is expected to grow.
In China and Europe, signs of economic recovery are emerging. China's services Purchasing Managers' Index (PMI) for August stood at 51.4, surpassing both the previous month's 50.4 and the market expectation of 50.6. The Ifo Institute for Economic Research has raised its forecast for Germany's economic growth this year from 0.8% to 1.4%.
In the commodities market, gold prices showed renewed strength, rising by 2.08% to $4,472.9 per ounce, while Brent crude oil fell by 0.12% to $95.52 per barrel. Analysts suggest that increased purchases by central banks and sovereign wealth funds, along with concerns over U.S. fiscal health, are supporting demand for gold.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.