The dominant macro signal overnight is the continued steepening of the US Treasury curve, with the 10-year yield rising 6 basis points to 5.15% and the 30-year climbing 5 basis points to 5.48% — levels that price in a structurally higher-for-longer Fed path and reflect the market's reassessment of fiscal sustainability and geopolitical inflation risks. The 2-year yield also edged up 3 basis points to 4.77%, compressing the inversion further and signalling that near-term rate cut expectations continue to be unwound. With the FOMC meeting on October 28 and the Fed's current target range at 3.75–4.00% following the September hike, Fed Chairman Warsh's scheduled remarks today at 12:30 JST will be closely watched for any signal on the November trajectory. The VIX fell 6.13% to 17.31, suggesting US equity participants are not pricing acute stress despite rising yields — but that calm has not translated to Asia.
For Asia-Pacific, the yield rise concentrates pressure on three fault lines: Japanese financials and exporters navigating a yen at 158.18 versus the dollar (down 0.22%) while the BoJ is widely expected to hold at its October meeting; Korean and Taiwanese semiconductor names already under AI capex scrutiny and now facing tighter global financial conditions; and Australian banks and miners exposed to both higher global funding costs and commodity softness, with BHP off 1.6% on weak copper output and NAB under pressure after flagging up to 2,500 job cuts. The CNY fix at its strongest since February 2023 — with USD/CNY at 6.6774 — reflects deliberate PBOC management even as Beijing expands its liquidity toolkit. Cross-asset pressure is most concentrated in the intersection of high-yield sensitivity and AI infrastructure financing, where the risk of de-rating is most visible in Japan's electronics and Korea's chipmakers.