Treasuries Fall as Haven Appeal Wanes on US-Japan Trade Deal

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Treasuries Fall as Haven Appeal Wanes on US-Japan Trade Deal.

treasuries & bonds :: 2025-07-23 :: source - bloomberg

By James Hirai

Bloomberg) -- Treasuries were poised to end a five-day streak of gains Wednesday as demand for havens waned after the US inked a trade deal with Japan.

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The yield on US 10-year debt trimmed an advance but remained one basis point higher 4.36%, halting a week-long slide. Germany’s benchmark borrowing costs rose one basis point to 2.60% while UK equivalents were up five basis points at 4.61%.

Hopes that the US will reach other trade deals ahead of its self-imposed Aug. 1 deadline are mounting. Secretary of the Treasury Scott Bessent sounded positive on the prospect in an interview on Bloomberg TV, saying talks with the EU are going better and negotiations are back on track with China. Secretary of Commerce Howard Lutnick — who recently said he was confident a trade deal with Europe will be reached — is set to be interviewed at 8:15 a.m. New York time.

Traders will also be mindful of a $13 billion offering of US 20-year securities later amid the sensitivity of long-maturity debt globally to growing fiscal concerns. A sale of 40-year Japanese bonds earlier saw the lowest bid-to-cover ratio since 2011 and the 10-year yield rose to the highest since 2008.

On Tuesday, Bessent shored up support for Federal Reserve Chair Jerome Powell, who has come under fire from President Donald Trump for keeping interest rates steady.

Money markets are betting the Fed will hold interest rates in a 4.25% to 4.5% range next week, according to swaps tied to policy-meeting dates. However, traders expect at least on quarter-point reduction by October with an 80% chance of a second by year-end.

(Updates yield levels in the second paragraph and adds remarks by US Treasury Secretary Bessent in the third paragraph)