Japan relaunches DOGE-style review to fund Takaichi pledges as bond yields rise
Japan relaunches a DOGE-style spending review to find funds for prime minister Takaichi's pledges as JGB yields hit multi-decade highs.
US stocks open for Columbus Day but bond markets are closed, with thinner liquidity and Iran headlines posing risks.
With the cash bond market closed, traders lose the main benchmark for rates on Monday. Treasury futures, the dollar, and equities could move on lower-than-usual volume, which raises the chance of sharp reactions to any news. Since Japan and Canada are also shut, liquidity across FX and futures will be thinner in Asia and North America. For oil, the main risk is Iran-related weekend developments; any escalation would show up first in crude futures and round-the-clock crypto-based oil venues, with bond markets unable to respond until Tuesday. Traders might hesitate to hold large positions into a long weekend with that risk looming.
---Stock exchanges remain open on Monday while the bond market takes a break, and with Iran headlines in play, that gap could be more significant than usual.
Summary:
US equity markets will open as usual on Monday, October 12, for Columbus Day, also observed as Indigenous Peoples' Day, but the bond market will be closed, creating a split session where traders face thinner liquidity and fewer reference points than usual.
The New York Stock Exchange and Nasdaq will run their standard hours. The Securities Industry and Financial Markets Association has confirmed its recommendation for a full close of US dollar-denominated fixed income trading, covering the cash Treasury market in the US, UK, and Japan, though each firm decides independently whether its desks stay open. US banks and federal government offices will be closed, so no major federal economic data are scheduled for release.
CME Group futures markets will trade, but with banks closed, cash settlement and collateral movements will be postponed until Tuesday. That means Treasury futures may trade while the cash market is shut, a situation that can lead to thin conditions and larger moves on any headlines.
The holiday also coincides with closures elsewhere. Japan will be closed for Health and Sports Day, removing Tokyo from the Asian session, and Canada's markets will be shut for Thanksgiving. Together, these closures make Monday's trading lighter than a typical start to the week.
The timing matters given the backdrop. US 10-year Treasury yields hit a 24-year high this week, oil prices are reacting to Iran war headlines, and The New York Times reported that US military options for a short campaign against Iran are ready should President Donald Trump change course, although he has pledged not to strike before the midterm elections. Any major development over the weekend would reach markets first through currencies, futures, and round-the-clock crypto venues, with the cash bond market unable to respond until Tuesday.
Normal trading resumes across all US markets on Tuesday, October 13, when bond traders will have to absorb any news from the long weekend in a single session.
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Disclaimer: this article comes from third-party media and is provided for reference only. It does not constitute investment advice. Crypto and other financial products carry significant price volatility risk, so please make your own decisions carefully.
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