---
type: "Topics"
locale: "en"
url: "https://longbridge.com/en/topics/29934441.md"
description: "The U.S. 20-year Treasury auction ended poorly, with the 20-year Treasury yield breaking 5% and the 10-year Treasury yield surpassing 4.5%, advancing to 4.6%. The outcome aligns with Dolphin Research's analysis in the weekly strategy report: once the 10-year Treasury yield exceeds 4.5% and continues to rise, U.S. stocks follow with a correction. Regarding the surge in Treasury yields, Dolphin Research also noted in the report that while Trump claims to be a fiscal hawk, his tax cuts ultimately result in significant deficit policies.This means the deficit issues from the pandemic-era stimulus remain unresolved, and the federal government is adding more debt. The lack of market confidence naturally led to lower auction prices for U.S. Treasuries. Meanwhile, strange developments are occurring with Japanese bonds: Japan was the largest holder of U.S. Treasuries, but now Japan and the U.S. are negotiating, with the U.S. pushing for yen appreciation. From a trading perspective, yen appreciation against the dollar would expose Japanese private institutions holding U.S. Treasuries to exchange rate risks. Japanese insurers, similar to those in Taiwan, previously did not hedge against currency risks during the dual rise of the dollar and dollar-denominated assets. Thus, the optimal move during yen appreciation is to repatriate funds: sell U.S. Treasuries and buy Japanese bonds.However, the latest news indicates the negotiations failed, meaning trades based on expected agreements must now be unwound—buying U.S. Treasuries and selling yen. The result is a yen correction and rising Japanese bond yields.$VG Long-Term(BLV.US), $ProShares Shrt QQQ(PSQ.US), $SPDR Gold Shares(GLD.US), $Currencyshares JPY Trust(FXY.US), $Invesco Db Dlr Idx Bearish ETF(UDN.US)Additional note: Overseas creditors hold about 30% of U.S. Treasuries, with over 15% held by foreign private institutions rather than official entities. Japanese private institutions hold an even larger share, giving them greater pricing power in Treasury transactions than official entities.The chart shows Japan was indeed selling U.S. Treasuries in April, but by the week of May 17, it had shifted to net buying. In other words, without Japanese buyers, Treasury yields might have risen even higher. If Japan and the U.S. eventually reach a trade agreement and the yen appreciates, Japanese buyers may further sell U.S. Treasuries. The weakening trend of the dollar is certain in this process. If the U.S. continues large-scale Treasury financing under these conditions, it’s no surprise that investors are betting on the 10-year Treasury yield soaring to 5%.Reference: "Big but Ugly" = "Big Deficit": Will U.S. Stocks Suffer Again Due to Treasuries? https://longportapp.cn/zh-CN/topics/29808412"
datetime: "2025-05-22T04:41:58.000Z"
locales:
  - [en](https://longbridge.com/en/topics/29934441.md)
  - [zh-CN](https://longbridge.com/zh-CN/topics/29934441.md)
  - [zh-HK](https://longbridge.com/zh-HK/topics/29934441.md)
author: "[Dolphin Research](https://longbridge.com/en/news/dolphin.md)"
---

# The U.S. 20-year Treasury auction ended poorly, wi…


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## Comments (30)

- **那个触摸一千万的孩子 · 2025-05-29T10:36:52.000Z**: This is a post from 7 days ago. I believe most people are aware of the issues with US Treasury bonds. If it doesn't break below 80 at this point, the corresponding gears of the story will slowly start to turn.
- **小马哥的交易员 · 2025-05-22T18:25:11.000Z**: The yield on 20-year U.S. Treasury bonds recently broke through 5%Rising U.S. bond yields -> Falling U.S. bond prices -> Decline in U.S. bond ETFs?Why are U.S. bond ETFs rising? A rebound from the dead?$Direxion 20+Yr Trsry Bull 3X(TMF.US)$iShares barclays 20+ Yr Treasury Bd(TLT.US)$Unitedheal
- **似雨若离 · 2025-05-22T14:45:25.000Z**: 😫👍
- **京城Z先生 · 2025-05-22T10:52:15.000Z · 👍 1**: This is a very bad signal.
  - **岸皙** (2025-05-22T10:53:31.000Z): Will Mr. Z have an analysis? I really want to see it🥺
  - **Lucky2026** (2025-05-22T10:53:44.000Z): Please elaborate, sir...
  - **京城Z先生** (2025-05-22T11:53:38.000Z): Dolphin Research's official summary is very good.
- **财到我家 · 2025-05-22T08:59:33.000Z**: I just want to know, if the US bonds collapse, can the US still be okay?
  - **淘气桃桃CiCi** (2025-05-22T10:31:42.000Z): It's okay, it won't die so soon...
- **淘气桃桃CiCi · 2025-05-22T08:57:31.000Z · 👍 7**: You are eyeing its 5% interest, but it is eyeing your 100% principal.
  - **岸皙** (2025-05-22T10:28:45.000Z): TLT is really quite attractive now.
  - **亚马逊全球关店** (2025-05-22T10:54:02.000Z): The problem is the price continues to fall.
  - **岸皙** (2025-05-22T11:05:45.000Z): Just lie flat when the market falls ()
- **小五_UC9VKH · 2025-05-22T08:30:55.000Z**: So can US bonds rise?
  - **抄在半山** (2025-05-22T08:57:13.000Z): U.S. bond yields rose, and correspondingly, U.S. bond prices fell; because no one wants to buy U.S. bonds.
- **Mars · 2025-05-22T07:28:25.000Z · 👍 1**: Do domestic institutions in the U.S. hold U.S. bonds on behalf of overseas investors?
  - **Dolphin Research** (2025-05-22T12:49:55.000Z): This possibility exists
- **阿尾一定可以 · 2025-05-22T06:30:38.000Z**: Will US stocks continue to fall?
  - **Lucky2026** (2025-05-22T07:54:30.000Z): Original poster, please answer the question.
  - **淘气桃桃CiCi** (2025-05-22T10:31:57.000Z): There will be ups and downs
  - **阿尾一定可以** (2025-05-22T10:48:52.000Z): Is it better not to make a move recently?
- **认知＆价值 · 2025-05-22T05:37:56.000Z · 👍 2**: Superb analysis, liked and took the first comment 😜
  - **Dolphin Research** (2025-05-22T07:42:26.000Z): Welcome👏, your comments are our motivation.
  - **认知＆价值** (2025-05-23T17:23:37.000Z): 😄
- **Dolphin Research · 2025-05-22T04:44:40.000Z · 👍 3**: Figure 2
- **Dolphin Research · 2025-05-22T04:44:15.000Z · 👍 2**: Can't paste the image, put it here:Image 1