U.S. Treasury bonds extend gains, 10-year yield drops to 5.14%

In Asian trading on Thursday, U.S. Treasury bonds continued to rise, with the yield on the 10-year Treasury falling by 4 basis points to 5.14%. The yield on the 2-year Treasury, which is more sensitive to monetary policy expectations, also declined. The yield on the 30-year Treasury, which had previously been heavily sold off due to concerns over inflation and fiscal conditions, also fell. Kit Lowe, Senior Analyst at ITC Markets, stated: “The market has finally reverted to the previous risk-averse mode, that is, buying sovereign bonds when equities are sold off.” Previously, higher-than-expected U.S. inflation data triggered a drop in the stock market and renewed market demand for bonds. Several asset management firms, including Pacific Investment Management Company, have recently stated that after the sell-off in bonds, investors should increase their allocation to bonds.