Q2 Bond Yields Slip as Yen Falls to 1986 Lows and UST Real Yields Hit Highs
Updated
Updated · LSEG · Jul 14
Q2 Bond Yields Slip as Yen Falls to 1986 Lows and UST Real Yields Hit Highs
3 articles · Updated · LSEG · Jul 14
Summary
Government bond yields fell modestly in Q2 as lower oil prices supported bonds, though ECB and BoJ rate hikes and the Fed’s cautious stance limited the rally.
US Treasuries sat at or near valuation extremes, with real yields near multi-year highs as the report linked a US capex boom to stronger growth and a possible break from the 2010s savings-glut regime.
The yen weakened to its lowest level against the dollar since 1986, driven by broad-based dollar strength highlighted in the report’s FX section.
Canada’s market showed more evidence of yield decoupling from the US, while correlations between Canadian investment-grade and US IG credit declined.
Across Q2 performance, gilts led government bonds, linkers lagged, and credit outperformed, underscoring a market still driven by valuation even as investors assess a potential regime change.