Asian Bond Yields Rise on Growing Expectations for Fed Rate Hike

By Sherry Qin

Asian bond yields rose, after hotter-than-expected U.S. inflation data and Federal Reserve officials' hawkish commentary raised the chances of a rate increase next month.

U.S. consumer prices rose 0.4% in October from the previous month, overshooting market expectations. Meanwhile, Fed governor Christopher Waller and Dallas Fed President Lorie Logan both made hawkish comments, suggesting that the central bank might consider raising rates at a faster clip.

"The pick-up in inflation is occurring at the same time as activity and the labor market are firming, raising the likelihood that inflation pressures are transitioning from exogenous shocks to being endogenously generated," ANZ Research analysts said in a note.

Expectations for a rate hike in December sent the benchmark 10-year U.S. Treasury yield above the 5% threshold on Tuesday.

The 10-year Japanese government bond yield rose 5.9 basis points to 2.754% early Wednesday while the 30-year JGB bond yield was 3 basis points higher at 3.906%. The 10-year Australia government bond yield climbed 5.5 basis points to 5.049%. New Zealand's 10-year yield was up 4.7 basis points at 4.780%.

As the swaps market has essentially priced in a December rate increase, it's questioning how restrictive U.S. monetary policy may ultimately need to become, said Pepperstone head of research Chris Weston.

Oil prices rebounded early Wednesday after recent slumps. Although President Trump has signaled he doesn't plan to restart major combat operations, strikes have continued as the U.S. and Iran battle over the control of the Strait of Hormuz.

The U.S. has repeatedly struck Qeshm Island as well as other locations near the waterway. On Tuesday, Iranian state media also said that Tehran had hit a small Omani island that is key to aiding the navigation of ships transiting the waterway.

Front-month West Texas Intermediate futures were up 0.6% at $86.52 a barrel, while front-month Brent futures were 0.75% higher at $92.19 a barrel.

Asian equities were mixed on Wednesday, as investors weighed U.S. inflation data against strong regional tech earnings.

South Korea's Kospi rose 0.6% and Japan's Nikkei Stock Average gained 0.8%. Hong Kong's Hang Seng Index dropped 0.8% and China's Shanghai Composite Index edged 0.2% lower.

Higher U.S. yields, political uncertainty and questions surrounding Nvidia's leadership have created a challenging backdrop for growth equities, said Pepperstone's Weston. Yet, investors remain prepared to buy weakness when valuations and positioning become sufficiently compelling, he added.

Write to Sherry Qin at sherry.qin@wsj.com

(END) Dow Jones Newswires

November 10, 2026 21:11 ET (02:11 GMT)