The Nikkei 225 Index climbed 1.3% to above 66,000 while the broader Topix Index advanced 0.8% to 4,045 on Thursday, snapping a two-day decline as Japanese shares tracked a positive lead from Wall Street amid a pullback in global bond yields from multi-year highs. The US Treasury Department said it will more than double repurchases of 10-, 20- and 30-year debt over the coming months after the 30-year Treasury yield surged to its highest level since 2007 earlier this week. Japan’s 10-year government bond yield also eased to around 2.84% after hitting a 30-year high of 2.95% earlier this week. Meanwhile, data showed Japan’s trade deficit widened sharply in July as imports surged to a record high on increased crude oil purchases, while export growth remained robust, supported by strong demand for AI-related chips. Notable gains came from index heavyweights including Kioxia Holdings (3.8%), Advantest (1.8%), SoftBank Group (3.2%), Nintendo (3.2%) and Toyota Motor (3%).

Gold held above $4,500 an ounce on Thursday after surging more than 4% in the previous session, underpinned by a sharp retreat in US Treasury yields as the government moved to rein-in long-term borrowing costs. The US Treasury Department announced it will more than double repurchases of 10-, 20- and 30-year debt in the next few months as the 30-year yield surged to its highest level since 2007 earlier this week. Lower borrowing costs reduce the opportunity cost for markets to hold precious metals, which carry no coupons, making them more attractive to investors. Meanwhile, minutes of the Federal Reserve's July meeting confirmed that some policymakers argued in favor of raising interest rates this year to prevent sharper inflationary pressure later on. Elsewhere, heightened uncertainty in the Middle East as the US and Iran remain at a stalemate kept inflationary risks in focus.

US stock futures edged higher on Thursday after posting a modest rebound in the previous session, as a sharp decline in Treasury yields helped improve investor sentiment. In regular trading on Wednesday, the Dow and S&P 500 rose 0.22% and 0.21%, respectively, while the Nasdaq Composite advanced 0.16%, with all three benchmarks snapping a three-day losing streak. The consumer discretionary, materials and consumer staples sectors outperformed the broader market, while industrial, technology and financial stocks lagged. Yields on longer-dated US Treasurys pulled back from multi-year highs after the government announced plans to more than double repurchases of 10-, 20- and 30-year debt over the coming months. The move came after the 30-year Treasury yield surged to its highest level since 2007 earlier this week. Investors now turn their attention to retail giant Walmart’s earnings later in the global day, along with the latest weekly jobless claims data.

Crude oil held near $86 per barrel on Thursday after gaining more than 3% so far this week, supported by heightened uncertainty in the Middle East as the US and Iran remain at an impasse. The two sides are also embroiled in a confrontation over the Strait of Hormuz, although President Donald Trump said oil continues to flow through the waterway while adding that he would be open to resuming talks with Tehran “at some point.” Meanwhile, the UAE announced a suspension of financial and economic transactions with Iran after accusing Tehran of launching ballistic missiles at its territory, adding to economic pressure on the Islamic Republic. Despite the elevated risks, Gulf producers have continued transporting significant volumes of crude through alternative routes and discreet shipments. In the US, EIA data showed crude inventories increased by 4.4 million barrels last week, while distillate stocks declined by 1.5 million barrels to their lowest level in more than a month.

US Treasury yields fell sharply after the Treasury announced it would significantly expand its purchases of long-dated government debt. The department said it would at least double the size of liquidity-support buyback operations covering securities with maturities from 10 to 30 years. The move came after 30-year Treasury yields recently climbed to their highest level since 2007, raising concerns about liquidity and market stability. Following the announcement, yields declined across the curve, with the 30-year rate falling as much as 9 basis points to 5.19%. The decision signals that Treasury officials are prepared to intervene if borrowing costs rise too sharply or market liquidity deteriorates. The announcement also came ahead of a $16 billion auction of new 20-year bonds, adding further focus to demand for longer-dated debt. Treasury Secretary Scott Bessent previously described the buyback program as an important tool for addressing market dislocations and supporting liquidity.

The Federal Reserve’s July meeting minutes showed that policymakers remained concerned about persistent inflation and the possibility that further rate increases could be required if price pressures fail to ease. Several officials judged that financial conditions may not have been restrictive enough, while others noted that tighter market conditions were already contributing to the Fed’s efforts to slow demand. A small group of policymakers who supported raising rates at the July meeting believed an immediate hike could have reduced the need for larger increases later. Officials generally viewed inflation risks as tilted to the upside, although some said financial markets were already doing part of the tightening work. Importantly, the meeting took place before subsequent data showed cooler employment and inflation, meaning the discussion may overstate the degree of tightening currently expected by markets.