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The decline in government-bond markets intensified, as investors predicted that interest rates would remain elevated. The yield on America’s ten-year Treasury bond approached 4.9%, the highest level since 2007. In Europe, the yield on Germany’s benchmark ten-year debt surpassed 3% for the first time since 2011. Speculation about the Bank of Japan raising rates soon led to Japanese bond yields reaching their highest point in ten years, prompting the central bank to make unscheduled purchases of government debt to maintain its yield control policy. The finance ministry declined to comment on whether it had intervened in currency markets, as the yen reached 150 against the dollar.
The sell-off extended to stockmarkets, causing the Dow Jones Industrial Average to turn negative for the year. The S&P 500 declined by 5% in September, while the NASDAQ Composite fell by 6%, making it the worst month for both indices in 2023 so far.
The Russian rouble dropped below the symbolic level of 100 against the dollar. A Kremlin spokesperson stated that there was “no cause for concern.” Officials have been pressuring the central bank to raise interest rates in order to halt the depreciation. The bank implemented an emergency increase in August and raised its main rate again last month to 13%. One factor contributing to the rouble’s decline is businesspeople withdrawing their funds from Russia, which has sparked a debate about reintroducing currency controls similar to those implemented at the beginning of Russia’s conflict with Ukraine.
2023-10-05 07:47:55
Post from www.economist.com
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