Global markets react to US Treasury yields and energy ceasefire

Global financial markets are reacting to shifting monetary policy expectations and geopolitical developments. US 10-year Treasury yields rose toward the 5% level, the highest in approximately three years, driven by expectations of interest rate hikes at the upcoming Federal Open Market Committee (FOMC) meeting. This movement pushed the USD/JPY exchange rate toward the 155.00 level.

In a significant geopolitical development, President Donald Trump announced via social media that Ukraine and Russia have reached an agreement regarding energy-related facilities, with both sides agreeing not to attack such infrastructure.

Regarding central bank policies, the Bank of Japan is widely expected to implement a 0.25% interest rate hike, bringing the policy rate to 1.25%, its highest level since 1995. Meanwhile, the market remains focused on the FOMC, where the consensus has shifted toward a baseline of interest rate hikes provided economic data supports it. In Europe, the European Central Bank has already implemented rate hikes, while the Bank of England is expected to hold rates steady in its upcoming meeting.