Surging Japan yields cement global rate reset - BlackRock

BlackRock highlights a global rate reset driven by hawkish Fed expectations, noting Japan's 10-year yields hitting 30-year highs and the yen falling to 1986 lows. This marks Japan's convergence with developed markets after years of ultra-accommodative policy. While the Bank of Japan's normalization is orderly, BlackRock warns of crowded short-yen positions. Consequently, BlackRock maintains an underweight stance on Japanese government bonds but favors Japanese equities and shorter-duration U.S. and European yield curves.