U.S. Treasury signals steps to curb long-term yields after 30-year hits 5.28%

The U.S. Treasury is signaling that it wants to prevent further increases in long-term Treasury yields, according to Bloomberg's August 9 report, and Wall Street traders have linked that view to joint U.S.-Japan yen support, softer language on long-term debt issuance and efforts to expand the Federal Reserve's FIMA repo facility. Bloomberg said those steps are aimed in part at reducing the risk that Japan would sell large amounts of U.S. Treasuries to raise dollars, which would push yields higher. The 30-year Treasury yield reached 5.28% on July 31, its highest since July 2007 and a 19-year high. Separately, Arthur Hayes said in his article "Yen-quake" that a stronger-yen strategy centered on repo use of Japan's Treasury holdings could "restart the money-printing machine" and lift Bitcoin and the broader crypto market as dollar liquidity rises.

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