Bond Markets Are Bullying the U.K. and Japan. One Has the Right Defenses.

Bond-market pressure is weighing on the U.K. and Japan, with government yields and currencies under strain and implications for equity markets. Since the Iran war began, U.K. 10‑year yields have risen from about 4.25% to 5.04%, while Japan’s 10‑year rose from 2.12% to 2.78% and its 30‑year hit 4.13%—the highest since issuance began in 1999. The piece argues Japan is better positioned to withstand the rout than the U.K., but both face fiscal credibility risks that could sap investor appetite for UK assets. Broader markets were mixed: Nvidia reported another strong quarter but failed to lift sentiment, oil edged lower on hopes for an easing Iran conflict, gold and Treasurys remained subdued at elevated yield levels. Overall, the note signals downside risk to U.K. assets (UK 100) amid persistent bond-market volatility and elevated global yields.