U.S. long-term Treasury yields fell markedly, the dollar weakened, and international gold prices surged after the U.S. Treasury announced on Wednesday that it would significantly increase the scale of long-term Treasury buybacks.
Gold futures on the COMEX topped 4,500 U.S. dollars an ounce on the day.
The U.S. Treasury said in a statement on Wednesday that it plans to at least double the size of its buyback program for 10‑ to 30‑year Treasury bonds, aiming to provide more liquidity support to the long‑end of the market.
Following the announcement, long‑term Treasury prices rose and yields fell. The 30‑year yield, which had climbed to around 5.34 percent, dropped noticeably, while the dollar index also declined.
Robert Gottlieb, a U.S. precious metals analyst, said the Treasury's move to expand its long‑term bond buyback program caught the market completely off guard.
He also said that lower long‑term Treasury yields and the potential for further dollar weakness are clearly positive for gold.
U.S. Treasury data shows that the federal government's total debt has surpassed 40 trillion U.S. dollars.
Market watchers believe that while expanding long‑term bond buybacks may help ease pressure in the long‑end of the market, it does little to address the underlying issues of widening fiscal deficits and the continued swelling of U.S. debt.
US expands long-term Treasury buyback program, driving gold prices sharply higher
US expands long-term Treasury buyback program, driving gold prices sharply higher
Japan's Defense Ministry is seeking about 8.9 trillion yen (about 56.1 billion U.S. dollars) for the 2027 fiscal year, setting a new record high, local media reported on Wednesday.
Kyodo News reported that the ministry will begin developing a submarine-launched hypersonic missile and push forward research on equipping unmanned submarines with long-range missile launch capabilities, according to the full contents of the disclosed fiscal 2027 defense budget request.
The report said that the defense budget request for fiscal 2027 prioritizes three areas. The first is a new defense approach to counter new forms of warfare involving drones and artificial intelligence (AI). The second is sustained response capability for prolonged conflicts. The third is the foundation of defense capabilities, including the production base for defense equipment and improved conditions for Self-Defense Forces personnel.
According to the report, the ministry is also developing a vertical launch system that can be loaded onto submarines. It will start work on low-cost domestically produced long-range missiles while also purchasing missiles from overseas. With these projects included, the final budget could reach around 10 trillion yen when it is formally compiled at the end of this year.
In late 2022, the Japanese government adopted three key security documents, setting a total defense budget of about 43 trillion yen for the five fiscal years from 2023 to 2027. Since fiscal 2023, Japan's defense budget has repeatedly hit record highs, raising concerns across Japanese society.
Analysts believe the continued expansion of defense spending sends a dangerous signal that the government is accelerating military buildup and seeking a breakthrough in military capability.
Japan plans record defense budget for fiscal 2027
