U.S. & Japan 30-Year Bond Yields Cross 5% - What It Means For India

Added: 2026-05-28

[00:00:00]Uh Mr. Sha 30-year paper in Japan and US is uh at a multi-deadal high both of them have topped 5% that is also one of the pain points that uh Indian fund managers are facing as FI's exit uh to get back either to their home market or maybe invest in somewhere higher uh you know potential returns. How are you seeing global bond yields? Even our 10-year paper you know very briefly climbed above 7%. How do you see this?

[00:00:30]Is it a threat?

[00:00:33]>> So you rightly highlighted first of all we need to understand couple of things that oil only not only impacts India it impacts lot of other economics and we will see an rise in inflation everywhere. So the rate cut cycle or the easy monetary policy cycle is now behind us. Everywhere we'll probably start seeing rate hikes and that is where it is getting factored in. Obviously you spoke about US markets and Japan markets. Japanese markets are already going through a significant different cycle in inflation. Even US the concerns have been thanks to previously because of tariff and now due to higher gasoline prices that inflation number on US can be significantly high.

[00:01:09]In fact the last print on CPI was upwards of 3.8%. Let's not forget that their overall fed fund rate today is at 3.5. Their inflation is 3.8. So that that that is why there's a lot of worries now across global markets also that the rate cycle being over and now the rate hike cycle will start. Our view is that uh first of all Indian bond market like uh like it is like largely owned uh sorry to a certain extent been owned by FBI in uh equities in debt the overall FBI penetration is very very limited. So we don't see any significant shock to Indian bond deals because of the uh money flowing out from Indian bond deals to global bond global bond markets. Our perspective is that uh the macros of India will largely determine the India fixed income bond deals and somewhere down line at this point of time we believe that markets are probably fearing an aggressive tightening stance from RBI and that is why we have seen this rise in bond Indian bond deals in India. It's not only the 10-year GC which has breached 7%. Let's look at three-year corporate bonds. So your corporate bonds touch AAA corporate bonds touch around 8% yields the money market curve has again gone up and probably you're looking at one year uh certificate of deposits or 3 month assets about 7 half 775. So the entire market today and so which is a very very big indicator of where interest rates are heading towards are pricing in more than 100 basis of rate hikes. So Indian markets are pricing in aggressive rate hikes because they believe that RBI will probably tighten monetary policy in anticipation of the rise.

[00:02:46]>> Global oil prices I would say are a minimal factor for the rise in or increase ins.

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