Bitunix Analyst: US Treasuries, Japanese Government Bonds, and Middle East Risks Remained Unresolved and Even Worsened, Global Markets Enter 'High Yield Stress Test'

May 19 The core risk weighing on global markets has shifted squarely from inflation to the repricing of sovereign bond markets. The yield on the 10-year U.S. Treasury officially crossed the 4.5% threshold, while the 30-year U.S. bond yield climbed back above 5%. Morgan Stanley has issued a sharp warning that this move has entered a dangerous zone that could trigger a significant pullback in U.S. equities. Traders are growing increasingly concerned that overlapping pressures from elevated oil prices, geopolitical tensions, and fiscal deficits could send long-term U.S. interest rates spiraling out of control. Meanwhile, strains in the Japanese market are deteriorating rapidly. The yield on Japan’s 30-year government bonds (JGBs) continues to hit fresh record highs, and Tokyo is even weighing compiling a supplementary budget to address energy and cost-of-living pressures. This signals that one of the world’s largest pools of low-interest funding is losing its stability. Critically, Japanese officials have made clear that if the yen approaches 160 against the U.S. dollar again, they stand ready to intervene in the foreign exchange market at any time—but they will avoid selling U.S. Treasuries (a move that would drive U.S. yields higher). This dynamic is creating a cross-constraint between global bond and forex markets. Another key market theme centers on the Middle East. Recent news that former President Donald Trump scrapped a planned military strike on Iran was initially interpreted by markets as a near-term easing of risk. But in reality, the U.S. and Iran are locked in a long-running war of attrition with no clear path to a resolution. Unresolved flashpoints—including control of the Strait of Hormuz, uranium enrichment disputes, and energy-related sanctions—mean oil prices and shipping volatility could continue to roil markets repeatedly. For crypto markets, Bitcoin (BTC) has recently entered a high-leverage oscillating structure. Liquidation heat maps show significant short-side liquidity remains clustered near the $78,000 level, while large long positions have built up around the $75,500 mark. BTC has been trading in a tight range between $76,000 and $78,000 lately, suggesting market participants are waiting for a clear directional catalyst. If global long-term interest rates continue to climb, volatility across risk assets (including crypto) could surge sharply once again.