Treasury and JGB auction stress tests demand for global duration

Japan's 10-year JGB yield has reached about 3%, its highest level in roughly 30 years, while the Treasury yield nears 4.786%. Japan's debt above 200% of GDP, BOJ normalization, possible reductions in Japanese foreign-bond demand, and projected September Treasury issuance near $215B heighten spillover risks, but strong auction demand currently offsets some market-functioning concerns.