The JGB market has been remarkably calm today even as other bond markets like the US endured commotions.
Last night, yields of US 10 year treasuries spiked anew. This seems to have unsettled US equity markets (stockcharts.com).
The negative sentiment in the US financial markets appear to have been carried over to Asia equity markets.
Such dour sentiment had been compounded by another early convulsion by China’s stock markets which crashed by 5.29%yesterday.
JGB calmness has been relative (investing.com). Yields of 10 year JGBs opened at near critical zones but eventually traded downwards. JGB 10 year still trades rangebound since the surge in May.
Perhaps dovish undertones by central bank officials have temporarily eased the selling pressures.
China’s PBoC pledged to address the cash crunch. This appears to have eased some concerns over a cash squeeze that may have prompted for a massive intraday recovery seen in the Shanghai index which had been down by as much 5+% midday.
Reversing the huge losses, the Shanghai index closed marginally lower. Meanwhile the Japan’s Nikkei closed down .72% this afternoon.
PBoC’s dovish tone may have also contributed to alleviating pressures on JGBs.
Moreover, in a speech, one ECB official also maintained a “dovish” stance stating that the ECB has “other measures, standard and non-standard, that we can deploy if warranted”
Since no trend goes in a straight line, the series of sharp selloffs (whether in stocks, commodities or bonds) will translate to equally volatile oversold bounces where the latter may find excuses through the central bank "steroid promising" developments.
Nonetheless, unless the bond markets of major economies will stabilize, selling pressures will remain the general trend.
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