# Asian markets hold up despite bond rout as US yields enter a structurally higher regime

- Link: https://www.thailand-business-news.com/markets/332037-asian-markets-hold-up-despite-bond-rout-as-us-yields-enter-a-structurally-higher-regime
- Published: 2026-09-30T23:37:30+07:00
- Author: News Desk

Asian equities were relatively resilient on Wednesday despite a severe global bond
sell-off that has pushed borrowing costs to levels not seen for years. The **10-
year US Treasury yield held around 5.23%**, near its highest since 2007, and was
heading for a monthly increase of almost **50 basis points**, its largest monthly
rise in roughly two years.

## Key points

 * US 10-year Treasury yields remain around **5.23%**, with the biggest monthly 
   increase in roughly two years.
 * MSCI Asia-Pacific ex-Japan gained **0.4%**, while Japan’s Nikkei rose **2.1%**.
 * Brent crude was around **US$103.13/barrel**, while the dollar was heading for
   a **2% monthly gain**.

### Why it matters

Thailand is entering the final quarter with a low domestic policy rate, flood-related
disruption and elevated energy costs. A structurally higher global yield environment
could increase financing costs and pressure the baht even if Thai equities remain
supported by strong electronics and AI-related investment.

ADVERTISEMENT

The bond-market deterioration reflects several forces acting simultaneously: higher
inflation expectations, heavy government borrowing and issuance, concerns over public
finances and elevated energy prices linked to the Middle East conflict. Japan’s 
10-year government bond yield was also on course for a **42bp quarterly increase**,
underscoring how the shift toward higher global yields is no longer confined to 
the US market.

SCI’s Asia-Pacific index excluding Japan rose **0.4%** on Wednesday. Japan’s Nikkei
gained **2.1%**, while South Korea’s Kospi was heading for a monthly gain of 0.7%.
The resilience reflects strong corporate earnings and continued enthusiasm around
AI, which are helping offset the higher discount rates normally associated with 
rising bond yields.

### Related**Posts**

###  󠀁[ASEAN Prepares Collective Oil Reserves Framework to Counter Regional Supply Shocks](https://www.thailand-business-news.com/asean/340054-asean-prepares-collective-oil-reserves-framework-to-counter-regional-supply-shocks)󠁿

###  󠀁[Thai Government Announces 109% Increase in Rice Exports to ASEAN](https://www.thailand-business-news.com/markets/commodities/339580-thai-government-announces-109-increase-in-rice-exports-to-asean)󠁿

###  󠀁[Thailand Business News — Morning Briefing](https://www.thailand-business-news.com/news/339062-thailand-business-news-morning-briefing-7)󠁿

###  󠀁[Asian Tech and Equity Markets Suffer Massive Losses from AI Rout](https://www.thailand-business-news.com/markets/339058-asian-tech-and-equity-markets-suffer-massive-losses-from-ai-rout)󠁿

China remains a notable exception. The CSI 300 was up only 0.2% and was heading 
for a **13% quarterly decline**, while the Shanghai Composite was on course for 
a 6.2% quarterly fall. The contrast suggests that technology-driven earnings strength
is not sufficient everywhere to overcome concerns about domestic growth, property
and broader economic conditions.

The currency and commodity backdrop remains challenging for Thailand and ASEAN. 
The dollar is on track for a **2% monthly gain**, while Brent crude was around **
US$103.13 a barrel**. Higher US yields and oil prices can pressure emerging Asian
currencies and raise imported costs, increasing the difficulty of maintaining accommodative
monetary policy.

The relief rally in Japanese equities highlights the intense relationship between
energy costs, inflation expectations, and monetary policy in an import-dependent
economy.

### Key Factors Behind the Market Pivot

 * **Easing Supply Concerns:** International benchmark Brent crude plummeted from
   volatile highs near $107–$108 a barrel down to approximately $102 a barrel. A
   major catalyst was Saudi Arabia partially reopening its vital East-West pipeline
   and expanding alternative crude routes, which greatly reduced fears of localized
   Middle East shipping disruptions.
 * **Alleviating “Imported Inflation”:** Because Japan relies on foreign imports
   for the vast majority of its energy needs, soaring oil prices act as a direct
   tax on corporate profit margins and consumer spending. The sharp retreat in crude
   relieved immediate pressure on input costs.
 * **The Bank of Japan (BOJ) Vector:** Throughout September 2026, spiking energy
   prices fueled speculation that the BOJ would be forced into an accelerated schedule
   of domestic interest rate hikes. Lower oil prices tempered immediate domestic
   inflation anxieties, offering a temporary breather regarding consecutive rate
   hikes.
 * **Technology Resurgence:** High-growth sector shares—specifically AI and semiconductor
   stocks—had been battered due to rising bond yields and energy macro pressures.
   Lower crude costs sparked a significant wave of tech buybacks, driving INDEXNASDAQ:.
   IXIC futures higher and pushing the INDEXNASDAQ:.IXIC counterpart INDEXNASDAQ:.
   IXIC up by over 2% in matching momentum.

These factors contribute to increased volatility and uncertainty in the bond market.
Investors are wary of potential interest rate hikes by central banks aiming to combat
inflation, which could further impact bond yields. Additionally, the geopolitical
tensions in the Middle East add another layer of complexity, potentially affecting
global supply chains and energy markets. As governments continue to finance their
efforts through significant borrowing, the long-term sustainability of public finances
remains a concern, prompting investors to reassess risk and seek safer assets.