Bessent's Fiscal Consolidation Plan Risks Triple Decline if Lacking Specifics

media.rakuten-sec.net··USJP·Read original
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Summary · why it matters

US Treasury Secretary Bessent's announcement of a US Treasury buyback temporarily lowered interest rates and strengthened the yen, but market reaction was limited, and disappointment over the lack of specifics in the fiscal consolidation plan could trigger a triple decline in Japan: falling US bonds, stocks, and the dollar. The buyback is scheduled from September 9 to November 4, with the per-operation cap raised to between $2 billion and $4 billion (approximately 634 billion yen), but long-term yields have returned to pre-announcement levels. Bessent has said he will soon unveil a fiscal consolidation plan, but without concrete measures, it risks disappointing markets and leading to a triple decline. This week, events include a press conference by Bank of Japan Deputy Governor Ryozo Himino, a speech by Federal Reserve Chair Warsh at the Jackson Hole symposium, and the G20 Finance Ministers and Central Bank Governors meeting, which could destabilize markets from September to October.

Impact on assets 3

Others▼ · 2 stocks
％Japan Government Bond 10Y
JP-10Y
▼ NegativeMonetaryrelevance

Treasury buyback temporarily lowered yields but long-term yields returned to pre-announcement levels; lack of specifics in fiscal consolidation could lead to rising yields.

％United States Government Bond 10Y
US-10Y
▼ NegativeMonetaryrelevance

Treasury buyback temporarily lowered yields but long-term yields returned to pre-announcement levels; lack of specifics in fiscal consolidation could lead to rising yields.

Others▼ · 1 stocks
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