The David Lin Report · Tuesday, August 25, 2026
Professor Steve Hankey explains that the defense of the Japanese Yen is linked to the US bond market because investors who borrowed cheap Yen to buy Treasuries would be forced to sell them if the Yen collapsed. He predicts the 30-year US Treasury yield could rise another 50 basis points due to factors like the war in Iran, inflation, and the US fiscal deficit.
“Investors have borrowed cheap Yen for years to buy treasuries.”
“So collapsing Yen would force them to dump those treasuries, which means defending Japan's currency, which is also a defense of America's bond market.”
“So all those three factors combined point to the fact that I think that the 30-year could at least go up 50 basis points from where it is now.”