Reference Message Network reported on April 12 that according to the "Nikkei Shimbun" on April 11, the implementation of the reciprocal tariff has been postponed for 90 days. In fact, this news had already spread in the New York market on the 7th, but it was quickly proven to be a "fake news" at that time. The Dow Jones Index rebounded instantly and then plummeted again.

On the 9th, the news of "postponing for 90 days" appeared again. This time, it was posted by U.S. President Trump on social media, along with the press conference of U.S. Treasury Secretary Beasant. It can be confirmed that "this is not fake news", and some large investment banks subsequently withdrew their previous market forecasts.

Although the media generally believe that Trump made concessions because he dislikes sharp fluctuations in stock prices, Wall Street professionals have different views.

They consider the selling off of U.S. bonds as the main reason prompting Trump to change his mind. Although capital still flowed into U.S. bonds considered safe assets, there were also bond sell-offs, and the market expressed its disapproval of Trump's policy concept of attempting to fill the fiscal deficit with tariff revenue by "voting with their feet". Ultimately, the U.S. bond market became a battlefield for institutional long and short positions.

The yield of 10-year U.S. Treasury bonds fell to 3.85% in the Asian session on the 7th and was subsequently sold off madly. On the 9th, it approached 4.5%, causing an unprecedented huge fluctuation in the U.S. bond market in a short period. During this period, many hedge funds suffered huge losses.

The U.S. bond market was the first to restart after the "9/11" incident and was renowned for having the best liquidity in the world. Faced with the market chaos, Treasury Secretary Beasant, who had long served in a hedge fund, finally felt the crisis.

Although he has always been loyal to Trump, after realizing the danger that the current administration might perish together with the market, Beasant "risked his life to remonstrate" like a senior official in Japan's Warring States period.

According to another report from the "Nikkei Shimbun" website on April 11, the pressure of "selling America" in the global financial market continued to increase. On the 10th, the Dow Jones Industrial Average fell by 2,100 points at one point, and the selling off of the dollar intensified. Despite the U.S. Trump administration urgently halting some reciprocal tariffs due to the surge in treasury yields, the market briefly stabilized before falling into turmoil again. The frequent changes in Trump's administration's policies have increased uncertainty and undermined credibility, prompting capital to accelerate its departure from the United States.

"A 145% tariff on imports from China." The White House's statement on the morning of the 10th triggered a stock market sell-off. The tax rate was further raised from the previously rumored 125%, increasing market concerns about the worsening of the Sino-U.S. trade war, which could severely damage the economy. The Dow Jones Industrial Average closed down 1,014 points (a decline of 2.5%), wiping out the record 3,000-point gain from the previous day.

Goldman Sachs analyst Dominique Wilson pointed out: "Policy uncertainty continues to suppress consumption and business activities." Analysis suggests that even if the Trump administration delays the implementation of some reciprocal tariffs, the risk of a U.S. economic recession remains high. Overseas investors who have traditionally purchased U.S. assets are likely to continue to worry about the lack of transparency in the U.S. legal system and policies, leading to sustained selling pressure on U.S. bonds and the dollar.

Trump urgently suspended most tariffs on the 9th, setting a 90-day transition period to negotiate with various countries, mainly because the market had fallen into chaos, especially the significant impact caused by the sharp rise in U.S. treasury yields.

U.S. treasury bonds are crucial to fiscal operations and are the largest financial commodity in the world. Fluctuations in long-term U.S. treasury yields affect global mortgage markets and financial systems. If we turn a blind eye to the rising trend of interest rates, it may lead to a financial market crisis.

Famous economist Edward Yardeni pointed out: "The bond guard mechanism is taking effect." Investors are pressuring the government to correct policies through selling, and the market's disciplinary function becomes apparent.

Market participants are more concerned about the possibility that overseas capital will leave the U.S. in the long term. It is rumored that Asian central banks are avoiding U.S. bond tenders, and European capital management giants have sold tens of billions of yen worth of U.S. assets this year.

Japan is the largest holder of U.S. bonds in the world. Japanese investors have become cautious. According to statistics from the Ministry of Finance of Japan, net sales of foreign bonds last week reached 2.5 trillion yen (approximately $17.5 billion), setting a new high in five months. Hiroya Yokoyama of Mitsubishi UFJ Trust in New York said: "Japanese institutions face enormous holding pressure, and the selling trend is likely to continue."

As Trump's tough policies shake market confidence, global capital is reconfiguring its investment map. This financial storm triggered by policy uncertainty may reshape the global economic landscape. (Translated by Ma Xiaoyun and Liu Lin)

Original source: https://www.toutiao.com/article/7492348930089435660/

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