Asian Markets Rise, Tracking Wall Street
Asia-Pacific stock markets mostly strengthened in trading on Thursday (20/8/2026), following the recovery of the main Wall Street indices after long-tenor United States (US) government bond yields fell from their highest levels in recent years.
Citing CNBC.com, market sentiment was also influenced by the US government’s plan to increase buybacks of long-term debt to ease pressure from the sell-off in the bond market.
In Japan, the Nikkei 225 index strengthened 0.66%, while the Topix index rose 0.57% in Thursday trading. Gains also occurred in South Korea with the Kospi index surging 3.11%, while the small-cap Kosdaq stock index rose 2.26%.
The Australian stock market also moved in positive territory with the benchmark S&P/ASX 200 index strengthening 0.59%. The positive movement in Asian markets came after the S&P 500 index previously managed to halt a three-session losing streak.
The S&P 500’s recovery occurred as long-tenor US government bond yields began to fall from their highest levels in recent years. The US government announced measures to ease market pressure after the recent bond sell-off drove a sharp rise in yields.
The US Treasury Department said it would increase buybacks of 10-year, 20-year, and 30-year debt securities to more than double in the coming months.
The policy was announced after the yield on 30-year US government bonds earlier this week surged to its highest level in nearly two decades.
Nevertheless, former Wells Fargo Head of Macro Michael Schumacher assessed that the easing of pressure in the bond market is unlikely to last long. He remains negative and expects long-term interest rates in the US to rise again.
According to Schumacher, one of the main factors that could drive long-term interest rates higher is the large US government budget deficit, which has shown no signs of improving.
In addition, increased defence spending is also expected to add pressure, especially after the conflict in Iran reinforced the need for government expenditure.
“In the US case in particular, there is a very large budget deficit and not many signs that it will improve,” Schumacher said in an interview with CNBC.
He added that the pressure actually already existed before the conflict in Iran and has now increased further.
Ahead of Thursday trading on Wall Street, investors will next scrutinise the release of US weekly jobless claims data. Economists surveyed by Dow Jones expect initial jobless claims for the week ending 15 August to reach 210,000.
In addition to employment data, the market will also await Walmart’s financial performance report for the second fiscal quarter, scheduled for release before the market opens. The retail company’s performance will be one of investors’ concerns in gauging the state of consumer spending in the US.